The Advisor Equity Trap: Protecting Your Cap Table
Written by Harry Prabandham
Curated by Rubric Financial
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How Advisor Equity Adds Up
- Giving 0.5% to each of 10 advisors means 5% of your company is committed to people who may contribute very little
- At a $160M exit, that 5% is worth $8M, often more than early employees who worked 60-hour weeks for years
- The typical advisor contribution: 2-3 intro emails, 1-2 calls per year, totaling roughly 20 hours over 5 years
- By Series A, VCs scrutinize bloated advisor pools, and excess advisory equity signals poor cap table management
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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