Startup Advisor: Your Greatest Asset or Worst Mistake?
I’ve seen it many times: a startup brings on an advisor, someone with a big name or deep industry experience, and for a while, everything seems great. They drop a few nuggets of wisdom, make a couple of key introductions, and suddenly, you feel like your startup is on the fast track to success. Then, six months later, they’ve ghosted you, but they’re still sitting pretty with a nice chunk of your equity.
This is why advisor agreements exist—to prevent startups from handing out stock like candy on Halloween and to make sure both sides actually get what they bargained for.
Why Advisors Can Be Game-Changers
The right advisor at the right time can make all the difference. Look at Mercury. The fintech startup, which offers banking services tailored to startups, gained critical early guidance from investors and industry experts, including Patrick Collison of Stripe. Their advisors helped them refine their go-to-market strategy, secure key banking relationships, and navigate complex regulatory hurdles, giving them the foundation they needed to scale quickly.
Then there’s Strava. The fitness tracking app benefited immensely from early advisors who were deeply embedded in the cycling and running communities. They helped the company nail product-market fit by focusing on features that elite athletes actually wanted, which then trickled down to mainstream users. Without this advisory input, Strava might have built a more generic fitness app that failed to stand out.
Advisors can provide connections, expertise, and credibility. But they can also take advantage of eager founders who don’t put the right guardrails in place.
Good Advisor vs. Bad Advisor
The Nightmare Scenario: Advisor Agreements Gone Wrong
Here’s how things can go sideways:
The Vanishing Act: You bring on an advisor, hand them 2% of your company, and after a few initial meetings, they disappear. They still own a piece of your business, but they’re offering nothing in return.
The Over-Promiser: Some advisors will promise the world—introductions, strategy, funding—and then deliver… absolutely nothing.
The Rogue Operator: An advisor starts acting like they run the company, making decisions behind your back or speaking on behalf of your startup without permission.
These scenarios are preventable—with a solid advisor agreement.
The Cycle of a Bad Advisor
What Should Be in an Advisor Agreement?
A good advisor agreement should include:
Equity Vesting: No immediate grants. Advisors should earn their equity over time, typically vesting monthly over 1–2 years, ensuring they stay engaged.
Defined Roles & Expectations: Be clear about what the advisor is expected to do—monthly calls, introductions, fundraising help, etc. Don’t just assume they’ll "add value."
Termination Clause: If the advisor disappears or isn’t providing value, you should be able to cut them loose—and stop their equity from vesting.
Confidentiality & IP Assignment: If they’re giving you strategic advice or helping build your product, you need to make sure anything they contribute stays with the company.
Non-Compete & Non-Solicit: You don’t want your advisor turning around and using what they learned at your startup to help a competitor or poach your team.
Bottom Line
Advisors can be game changers, but only if you structure the relationship properly. A handshake deal might feel right in the moment, but when that advisor disappears (or worse, starts causing problems), you’ll wish you had something in writing.
Startups are risky enough—don’t add unnecessary risk by bringing on advisors without a clear, structured agreement. Protect yourself, your company, and your equity. And remember: if someone balks at signing an advisor agreement, that’s a big red flag.
Just like a business prenup, an advisor agreement isn’t about mistrust—it’s about making sure everyone plays their role and the startup succeeds. Because at the end of the day, that’s what really matters