Should advisors get equity — and how much?
By SuLe · Updated 6 May 2026
Advisors can get equity, but keep it small and always vested: the market range is typically 0.1%–1%, occasionally up to 2% for an exceptional, hands-on advisor. Give it through a documented advisor agreement, usually as options that vest monthly over one to two years, so the equity tracks the value the advisor actually delivers.
Key facts
- Advisors typically receive 0.1%–1% of equity, occasionally up to 2% for an exceptional, hands-on advisor — treat these as market ranges, not fixed rates.
- Advisor equity commonly vests monthly over one to two years, often with a short cliff of around three months.
- It should be documented in an advisor agreement covering scope, vesting, confidentiality and IP assignment.
- Options usually beat outright shares — they avoid handing over votes and a dry tax charge to someone who has paid nothing.
- Advisor shares or options are employment-related securities and may be reportable to HMRC.
Should advisors get equity at all?
Sometimes — but only for advisors who genuinely move the needle, and only when cash is not a better fit. Equity is your scarcest resource, and every slice given away dilutes the founders and reduces what is left for employees and investors.
A great advisor who opens doors, lends credibility, or shapes strategy can be worth a small equity grant. A name on a website who takes a call every few months usually is not.
The honest test is whether you would miss them if they left. If the answer is no, a thank-you and expenses are more appropriate than a permanent claim on your cap table.
How much equity do advisors typically get?
Market practice keeps advisor equity small. Advisors commonly receive somewhere in the range of 0.1% to 1%, and occasionally up to around 2% for an exceptional, deeply hands-on advisor — but these are norms, not rules, and the right number depends entirely on the commitment.
Benchmark against what the advisor will actually do. A single well-connected introducer sits at the bottom of the range; someone giving you regular hours and materially shaping the company sits nearer the top.
| Advisor involvement | Typical equity (market practice — verify against your situation) |
|---|---|
| Occasional advice, a few introductions | Around 0.1%–0.25% |
| Regular input, name attached, some hands-on work | Around 0.25%–0.5% |
| Deep, ongoing, hands-on involvement | Around 0.5%–1% |
| Exceptional advisor acting almost like a fractional executive | Occasionally up to ~2% |
Treat every figure above as a starting point for negotiation, not a going rate.
Should advisors receive shares or options?
Usually options, or a carefully structured small share grant. Options let the advisor share in the upside without receiving voting shares, and without a "dry" tax charge — a bill on shares they have paid nothing for and cannot yet sell.
Outright shares hand over votes and, potentially, an immediate income tax charge, because shares given for less than market value are treated as employment-related securities. Growth shares are one structuring option some startups use to limit that exposure.
Whichever route you pick, keep the amount inside your planned option pool so advisor grants do not quietly eat into the equity you need for employees.
What vesting and paperwork does advisor equity need?
Vest it, and document it. Advisor equity commonly vests monthly over one to two years — shorter than a founder's four years, because the relationship is lighter — often with a short cliff of around three months so a quick fade-out costs you nothing.
The grant belongs in an advisor agreement that records the scope of the role, the equity and vesting, confidentiality, and IP assignment so that anything the advisor helps create belongs to the company. Under the Companies Act 2006 and HMRC's rules, the grant is likely an employment-related security, so check the reporting position on gov.uk before you grant.
Worked example
Olu founds a B2B fintech and wants Marisol, a former payments-company operator, as an advisor. She agrees to two calls a month, warm introductions to three banks, and hands-on help with the first partnership.
Given her hands-on involvement, Olu grants her options over 0.5% of the company, vesting monthly over 24 months with a 3-month cliff, inside the company's 10% option pool. It is documented in an advisor agreement with confidentiality and IP assignment.
Marisol leaves after 15 months once the partnership is signed. She has vested 15/24ths of her 0.5% — roughly 0.31% — and the unvested balance simply returns to the pool. Olu got real value, and the cap table only carries the equity Marisol actually earned.
Where founders go wrong
Granting fully vested equity up front.
If the advisor drifts off after two calls, they keep the lot. Always vest, with a short cliff.Giving voting shares instead of options.
You hand a part-time helper a say in company decisions and a possible dry tax charge. Options usually avoid both.No advisor agreement.
Without a signed document covering scope, vesting and IP, you have an undefined promise and no clarity on what you are buying.Ignoring the tax and reporting.
Advisor shares or options can trigger income tax charges and HMRC reporting — check the position before granting, not after.
Related questions
How much equity should an advisor get?
Advisors typically receive somewhere between 0.1% and 1%, occasionally up to 2% for an exceptional, hands-on advisor. The right figure depends on how much time and how much genuine value they bring. Treat these as market ranges, not fixed rates, and benchmark against what the advisor actually commits to.
Should advisors get shares or options?
Usually options, or a small share grant with the tax handled carefully. Options avoid handing over voting shares and a dry tax charge on someone who has paid nothing. Whichever route you choose, it should be documented, vested, and reported to HMRC as an employment-related security where required. [More: Can contractors or advisors receive share options?]
How should advisor equity vest?
Commonly monthly over one to two years, often with a short cliff of around three months. Advisor relationships are shorter and lighter than founder or employee ones, so the vesting period is shorter too. Vesting protects you if the advisor drifts away after a few introductions. [More: What is a vesting cliff?]
Do I need an advisor agreement?
Yes. An advisor agreement records what the advisor will actually do, the equity and vesting, confidentiality, and IP assignment so anything they help create belongs to the company. Without it you have an undefined promise of shares and no clarity on what you are getting in return. [More: What should an advisor agreement include?]
Can advisor equity be taxed?
It can. Shares or options given to an advisor for less than market value are employment-related securities and can create income tax charges, and acquisitions are reportable to HMRC. The exact treatment depends on the structure, so take advice before granting — it is far cheaper than fixing it later.
Advisor equity looks trivial until a half-percent grant with no vesting and no IP clause turns into a permanent line on your cap table and a tax question at your next round. A SuLe solicitor can structure the grant, draft the advisor agreement, and flag the HMRC reporting before you sign. Get your founder documents reviewed — book a free consultation and give equity away on terms that protect you.
Keep reading: How much equity should a startup CTO get? · What is a cap table and how do I keep it clean? · What is a vesting cliff? · Can contractors or advisors receive share options? · What should an advisor agreement include? · What are growth shares?
Primary sources: Companies Act 2006 · GOV.UK — Tell HMRC about your employment related securities schemes
