Currency for advisors:stock options
Brad Feld, VC extraordinaire, has this excellent post about the compensation that early stage advisors should get. What is more interesting is that Brad actually talks numbers!!!
For example, 1% vested over four years is in the top range of the compensation bracket. What Brad usually prefers is 0.25% <=x <=1%.
However, one of the more interesting aspects of this is trigger acceleration of vesting.
‘Tis very simple actually; I put my blood ‘n sweat in the Company; Company gets acquired; I get screwed out of my options.
The alternative is to have a clause that says - In the event of a M&A only (single trigger event), or else a M& followed by me getting fired (double trigger event), I will get automatic acceleration of n on my vesting.
The other interesting aspects coming out of his incomparable term sheet series , is that it could be more advantageous to have a vesting period of one year and re-visit the relatioship after that as well as no-cash-compensation.
Cool. Now about that company…