Advisory Shares: How Much Equity to Give Advisors (FAST Agreement Guide 2026)

Advisory shares are a small slice of equity a startup grants to an advisor in exchange for ongoing help: introductions, hiring, product or industry expertise. They are not a special class of stock. In practice they are common stock or non-qualified stock options, usually between 0.07% and 1% of the company, vesting over about two years.

TL;DR: The median advisor grant on Carta was 0.25% at pre-seed, about 0.1% at seed and 0.07% at Series A, across 47,000 US grants (Carta, 2024). The Founder Institute's FAST agreement, updated to version 3 in July 2026, suggests 0.10% to 1.00% depending on stage and how involved the advisor is (Founder Institute, 2026). Vest over two years with a short cliff, put it in writing, and do not hand out 1% for a few coffees.

What Are Advisory Shares?

Advisory shares are equity compensation for advisors, people who help a startup without being employees, founders or investors. The startup pays in ownership instead of cash, so an early company can get senior help it could not afford on salary. The grant is usually restricted stock or stock options, documented in an advisor agreement (Founder Institute, 2026).

The name is informal. On your cap table you will not find a line called "advisory shares". You will find common stock or options held by a person whose role is "advisor". That matters, because the type of instrument decides how the advisor is taxed and how much paperwork you need (more on that below).

Advisors usually help with three things:

• Network: intros to investors, customers or senior hires.
• Expertise: a domain you lack, such as healthcare regulation or enterprise sales.
• Credibility: a known name on your site and in your pitch deck.

If someone will work on the company most days, they are not an advisor. Treat them as a cofounder or an early hire, and read how to split equity with a cofounder or how to hire your first startup employee instead.

How Do Advisory Shares Work?

Advisory shares work like other startup equity: the company grants a fixed number of shares or options, and they vest over time while the advisor keeps helping. The most common advisor schedule is two years, with no cliff or a short three-month cliff (Carta, 2024). Employees and founders usually vest over four years with a one-year cliff (Carta, 2026).

The usual flow looks like this:

1. Agree on scope. How often you meet, what the advisor will do, for how long.
2. Sign an advisor agreement. The FAST template is the common starting point.
3. Board approval. The board approves the grant, like any equity grant.
4. Grant. Restricted stock (the advisor buys shares at today's price) or options (the right to buy later at a fixed strike price).
5. Vesting. Shares unlock month by month. If the relationship ends early, unvested shares go back to the company.

Options need a strike price at fair market value, which for a US startup means a current 409A valuation. Grant before you have one and the advisor can face tax penalties.

Advisor grants often come from the same option pool as employee grants. If your pool is small, check how much is left before you promise anything. A VC term sheet will usually ask you to top up the pool anyway.

How Much Equity Should an Advisor Get?

Most advisors get between 0.1% and 0.5% of the company, and less the later the stage. Carta's data on 47,000 grants from US startups to US advisors shows these medians for 2023 (Carta, 2024):

Carta's earlier cheat sheet, built on more than 20,000 grants, lands in the same place: 0.23% median at pre-seed, 0.10% at seed (down from 0.13% the year before) and 0.07% at Series A (Carta, 2023).

Two takeaways. First, 1% is an outlier, not the norm: only the top decile of pre-seed advisors gets that much (Carta, 2025). Second, the stage drives the number. A 0.25% grant before you have a product is a riskier bet for the advisor than 0.07% after a Series A.

What Is the FAST Agreement?

The FAST agreement (Founder/Advisor Standard Template) is a free, standard advisor contract published by the Founder Institute. It includes an equity grid that sets the grant by company stage and by how much the advisor does. The first version came out in 2011 and was drafted with the law firm Orrick (TechCrunch, 2011).

In July 2026 the Founder Institute released version 3, with stages renamed to funding rounds and two engagement levels instead of three (Founder Institute, 2026):

Under both versions the grant can be restricted stock or options, with vesting given as two years and a three-month cliff (Founder Institute, 2026). The Expert level means more than meetings. The Founder Institute's own example is "meeting with the team monthly, recruiting some talent, and taking a customer call."

You can download the agreement for free from the Founder Institute agreements page. Have a lawyer review it before you sign, especially outside the US.

FAST v3 vs v2: What Changed in 2026?

FAST v3 replaces the old stage names with funding rounds and raises the grid for standard advisors at the earliest stage. Version 2, dated August 2020, used Idea, Startup and Growth stages (Founder Institute, 2020):

What this means for you:

• Pre-seed standard advisors get double the v2 number (0.50% vs 0.25%). That is still twice Carta's real-world median of 0.25%.
• Series A grants are lower than v2's growth stage: 0.10% and 0.50%. Carta's Series A median is 0.07%.
• The middle level is gone. The Founder Institute says "the Advisor commitment levels have been simplified and standardized" (Founder Institute, 2026).

Our read: use the FAST grid as a ceiling and Carta's medians as the anchor. If an advisor asks for the Expert number, ask what the projects are.

Worked Example: Advisory Shares on a 10M-Share Cap Table

Here is what a seed-stage Expert grant under FAST v3 looks like on a company with 10,000,000 fully diluted shares. The numbers are illustrative.

• Grant: 0.75% of 10,000,000 = 75,000 shares (options or restricted stock).
• Vesting: 24 months with a three-month cliff, so 3,125 shares per month.
• At month 3: the cliff releases 9,375 shares at once.
• At month 12: 37,500 shares vested, half the grant.
• At month 24: all 75,000 shares vested.

What happens to the founders? If the 75,000 shares are newly issued, every existing holder is diluted by the same factor: 10,000,000 / 10,075,000, or about 0.993. A founder with 40.00% drops to about 39.70%. If the shares come from an option pool that is already counted in the fully diluted total, the founders' fully diluted percentage does not move at grant. You can model both cases with our dilution calculator.

If the advisor stops after 8 months: 25,000 shares have vested (8 × 3,125). The other 50,000 go back to the company or the pool.

Advisory Shares vs Equity: What Is the Difference?

Advisory shares are equity. The difference is who gets them, how much, and on what terms. Here is how an advisor grant compares with the other equity on a typical cap table:

Investors buy preferred stock, which carries rights such as a liquidation preference. Advisors almost always get common stock or options on common. In a modest exit, preferred is paid back first, so an advisor's 0.25% can be worth less than 0.25% of the sale price.

How Are Advisory Shares Taxed?

How advisory shares are taxed depends on the instrument. This is general information, not tax advice: the advisor should talk to their own accountant.

• Options are non-qualified (NSOs). Incentive stock options are only for employees: the tax code requires the holder to be an employee of the company from grant until shortly before exercise (IRC §422(a)(2), Cornell LII). Advisors are not employees, so they get NSOs.
• NSOs are taxed at exercise. For options without a readily determinable market value, which covers private startups, "there's no taxable event when the option is granted." At exercise the advisor reports the fair market value of the stock minus what they paid (IRS Topic 427, 2026).
• Restricted stock and the 83(b) election. If the advisor buys restricted stock that vests over time, they can file an 83(b) election to be taxed on the value at purchase instead of as it vests. The deadline is 30 days after the transfer, with no extension. Since November 2024 the IRS offers Form 15620 for the election (PwC, 2024).

On the securities side, US private companies usually grant advisor equity under SEC Rule 701, which covers consultants and advisors who are natural persons, provide real services, and are not helping raise capital (SEC Release 33-7645, 1999). That last condition matters: an "advisor" whose job is to find investors is a different arrangement, and may need a different one legally.

Do Advisory Shares Dilute Founders?

Yes, advisory shares dilute founders, but usually by less than 1% per advisor. New shares shrink everyone's percentage by the same factor, as in the worked example above. Grants from an existing option pool do not change fully diluted ownership at grant, because the pool was already counted, but they use up shares you would otherwise give to employees.

The risk is the total, not one grant. Five advisors at 0.5% each is 2.5% of the company, about what a senior early hire might get. Keep a running total and review it before every round. Our guide to startup equity dilution shows how small grants add up across rounds.

What Are Advisory Shares on Shark Tank?

On Shark Tank, "advisory shares" usually means an investor asks for extra equity on top of the cash-for-equity deal, in exchange for ongoing help. It is the same idea as a startup advisor grant: equity for advice and network, not for cash. Treat the on-air number as a negotiation, not a benchmark.

For a real startup the useful lesson is the reverse. If an investor wants advisory shares on top of their investment, you are paying twice for the same relationship. Ask what the extra work is, and tie it to vesting.

When Should You Not Give Advisory Shares?

You should not give advisory shares when the help is one-off, vague or replaceable by a paid consultant. Equity is the most expensive currency a startup has. Common mistakes:

• Equity for a single intro. Thank them, or offer a finder's fee only if it is legal where you are. Do not give stock.
• No vesting. If the advisor disappears after two months, fully vested shares stay on your cap table forever.
• No written agreement. A handshake "1% for helping out" turns into a dispute at your first due diligence.
• Advisors who raise money for you. Rule 701 does not cover capital-raising services, and paying people to sell securities can create broker-dealer issues. Talk to a lawyer.
• Too many advisors. Five names on a slide impress less than one who actually takes calls.

How to Set Up an Advisor Agreement, Step by Step

Step 1: Define the job

You get a clear scope both sides agree on. Write down meeting frequency, the two or three outcomes you expect (for example, three enterprise intros a quarter) and the term. You are done when the advisor agrees with the list in writing.

Step 2: Pick a number

You get a grant size you can defend. Start from Carta's median for your stage, then check the FAST v3 grid as a ceiling. You are done when you can explain the number in one sentence.

Step 3: Fill in the FAST agreement

You get a signed contract. Download FAST from the Founder Institute, set vesting (two years, three-month cliff is common) and the instrument. You are done when both of you have signed and a lawyer has reviewed it.

Step 4: Approve and grant

You get a clean cap table entry. Get board approval, make sure your 409A is current if you grant options, and record the grant in your cap table tool. You are done when the advisor appears on the cap table with the right vesting start date.

Step 5: Review every quarter

You keep the relationship honest. Check the outcomes from Step 1. If the advisor is not helping, end the agreement: unvested shares return to the company.

Where Startupage Fits

Good advisors are usually people you meet while building, raising or hiring. On Startupage you can create a free founder profile with verified revenue, publish open roles and fundraising rounds as opportunities, and get found by investors and experienced operators. If you are looking for someone more involved than an advisor, see our guide on how to find a technical cofounder, and use the equity split calculator when you get to the numbers.

Frequently Asked Questions

How much equity should an advisor get?

Most startup advisors get 0.1% to 0.5%. Carta's medians are 0.25% at pre-seed, about 0.1% at seed and 0.07% at Series A (Carta, 2024). The FAST v3 grid goes from 0.10% to 1.00% depending on stage and involvement (Founder Institute, 2026). Only the top 10% of pre-seed advisors get 1% or more.

What is the FAST agreement?

FAST stands for Founder/Advisor Standard Template, a free advisor contract from the Founder Institute. It sets the equity grant by company stage and advisor engagement level, with two-year vesting and a three-month cliff. Version 3, released in July 2026, uses pre-seed, seed and Series A stages.

Are advisory shares worth anything?

Advisory shares are worth something only if the company exits or pays dividends, and only after preferred investors are paid back. Until then they are illiquid. That is why stage matters: 0.25% of a pre-seed startup is a long shot, while 0.07% of a Series A company has a clearer path to value.

Do advisory shares vest?

Yes, advisory shares should always vest. The most common advisor schedule is two years with no cliff or a three-month cliff (Carta, 2024). If the advisor stops helping, unvested shares return to the company, which protects founders and future employees.

Can an advisor get incentive stock options (ISOs)?

No. ISOs are reserved for employees under the US tax code (IRC §422). Advisors receive non-qualified stock options (NSOs) or restricted stock. NSOs are taxed at exercise on the difference between the stock's fair market value and the strike price (IRS Topic 427, 2026).