Advisor Contract Template

· The agreement assumes that the consultant will only receive compensation in shares (not cash compensation) and that the consultant can actually be classified as an independent contractor and not as an employee. If they are more likely to be classified as employees, you should know your minimum wage and pension obligations and seek appropriate employment advice. Contractors must deal carefully with consultants. Just because someone has a good reputation or expertise doesn`t mean they`re a good consultant or there`s the necessary level of good chemistry. The Founder Institute recommends that an entrepreneur work with a potential advisor for at least a month and spend at least 8 hours together before discussing the FAST agreement. The FAST agreement includes a three-month “cliff” in the acquisition of equity that allows an unproductive advisory relationship to be terminated without the need to allocate equity in the first three months. Advisors covered by the FAST agreement are founders and senior executives for strategic advice through advisory board roles, and these advisors are generally remunerated by equity. The FAST agreement is not designed for traditional project consulting and “work for hire” relationships. There are three levels of maturity of the company that affect compensation in shares: idea, start-up or growth. There are also three levels of engagement for a consultant that also affect compensation: standard, strategic or expert. So, for example, if a consultant provides expert assistance to a start-up in the start-up by meeting with the team on a monthly basis, recruiting talent and taking a customer call, that advisor earns 1% of the company in the form of restricted shares or options acquired over a two-year period; while a similar level of commitment to a growth-stage company is offset by only 0.6%. The FAST Equity Framework is described below, and the full agreement explaining everything follows.

· Stock compensation is structured as an options issue under a stock option plan for start-up employees – in the vast majority of cases, it is the most tax-efficient and easiest way to obtain equity for advisors. If the start-up or consultant is not eligible for the ATO (e.B start-up ESOP tax breaks. if the services are provided by the consultant through a company), you may need tax advice on the best equity structure. The FAST agreement is designed to save time and money when negotiating relationships with consultants. There is only one page to fill out and no legal assistance is required. UK Startups To complement the Founder Institute`s resource in this discussion, we have launched the consultative agreement. This free agreement template is UK-friendly and covers the usual big issues – appointment and termination, time commitment, roles and duties, fees, conflicts of interest and confidentiality. Of course, when discussing the arrangement, you may come across other points that you can include (exclude) or make other changes. The FAST agreement is free of charge and can be modified if necessary. Please review any modified FAST agreements from the original template to ensure that you do not sign any unexpected conditions. With a single signature and a checkbox on the FAST agreement, contractors and advisors can agree in minutes on how to work together, what to achieve and the right amount of stock compensation.

For American startups, the Founder Institute offers advice on numbers, as well as a free agreement template to eliminate the formal framework of the relationship quickly and without any legal headaches. You can read their guide and get the American model here. A classic approach for an entrepreneur to hire a consultant could follow these broad lines. To learn more about how to work with advisors, visit Board of Directors and Advisors. You can also check out Create and Protect for articles on how to protect your company`s intellectual property. 11. Limitation of Liability. In no event shall the Company be liable for any consequential, indirect, exemplary, special or incidental damages arising out of or in connection with this Agreement. The Company`s total cumulative liability in connection with this Agreement, whether in contract, tort or otherwise, shall not exceed the total amount of fees owed by the Company to the Consultant for the services provided under this Agreement.

An advisory contract must be used between a company and its consultant. The agreement sets out the expectations of the relationship, such as the work done on behalf of the consultant and compensation. The agreement should also include certain key conditions such as confidentiality and attribution of the work product. The idea is that it is short and easy to use. Accessibility is at the heart of our open source VC documents, so it`s as simple an English as possible. It`s a balanced deal that we think startups and consultants would feel comfortable signing without a bunch of negotiations. It won`t be perfect for every consultant and situation, and there are a few settings for its use that we`ve outlined below, but we hope it will make life easier for the startup community and save you legal fees along the way. It`s extremely important for founders to get the right advice at every stage of their startup journey, whether it`s in terms of digital marketing, capital raising, or industry-specific advice. This means that founders often want to hire consultants for their startup, but it can be expensive to ask lawyers to prepare tailor-made deals every time. So we decided to set up this consultant agreement model that allows startups to get the advice they need. The Founder/Advisor Standard Model (“FAST”) was developed by the Founder Institute to help budding entrepreneurs in the startup programs we run globally set up advisory boards and connect with the mentors they interact with throughout the program. In 2011, the Founder Institute made the FAST agreement public, and since then we have made gradual updates to version 1 of the agreement.

The 1. In August 2017, the Founder Institute released a draft version 2 that includes a number of improvements: but before we think about the number of shares or options to issue an advisor, there are a number of points to be settled. What role does the consultant play? Will it provide marketing information or advice at the board level? How long should she spend each month and for how long? What is it paid? Establishing these points will help determine the right amount of fairness and ensure that everyone is on the same page in terms of expectations and responsibilities. · Service descriptions and the amount of compensation in shares are just suggestions (based on what we often see in the market) – they can and should be tailored to each advisor`s specific circumstances. 9.2. Non-acquisition. During the term of this Agreement and for a period of twelve (12) months after the termination of this Agreement for any reason, the Consultant agrees not to attempt to distract or disrupt the development of the Company`s business by recruiting, hiring, contracting and communicating with the Company`s employees. Previously, we published guidelines on how to issue the right number of shares/options to employees and advisors. As we have seen in this article, sharing fairness with employees and advisors is often used as a motivational tool and as a way to develop a company`s relationship with that person.

The FAST agreement is used by tens of thousands of entrepreneurs and consultants each year to establish productive working relationships, business advice and support for a standardized amount of capital. If you`re interested in working with dozens of potential mentors and consultants to build your startup, then you should apply for a local Founder Institute program. You can apply at the following link: The FAST agreement recommends standard equity grants for a single consultant. It is not uncommon for a tech start-up to have a 5% share pool allocated to a group of strategic advisors or an advisory board. Cooley LLP, any company affiliated with Cooley LLP, including Cooley (UK) LLP and Cooley SG LLP* and their respective partners, employees and representatives of the foregoing (collectively, “Cooley”), do not endorse or recommend the use of default values or materials on CooleyGO.com, and Cooley does not express any opinion or recommendation as to what is or should be, a standard “contract” document. Terms and conditions should be negotiated based on your specific situation, and relevant documents should be tailored to the specific legal and business requirements of the proposed transaction. Additional documentation may be required for the planned transaction. Cooley assumes no responsibility for the content of the materials provided on CooleyGO.com or for the consequences of your use of such materials. You are responsible for ensuring that all required securities filings and/or other legally required filings, if any, are prepared and filed. You should consult a licensed attorney in your jurisdiction, as well as tax advisors, before using or relying on documents on CooleyGO.com, especially if you don`t understand any of their terms.

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