Advisory Agreement Template With Vesting

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Description

The Advisory Agreement Template with Vesting is designed to establish a formal relationship between an investment advisor and a fund's trustee, detailing the advisor's authority and responsibilities regarding investment management. This template includes key features such as the advisor's duties, rights to make investment decisions, compensation structures, and provisions for liability and indemnity. Users can fill in specific details such as dates and names, while the adjustable sections allow for customization based on the mutual agreement of the parties involved. The form is particularly useful for attorneys, partners, owners, associates, paralegals, and legal assistants as it provides a clear framework for compliance with relevant investment laws, including the U.S. Investment Advisers Act. It helps legal professionals safeguard their clients' interests by outlining important terms and conditions to foster transparency and accountability in investment management. The structured layout enhances readability, ensuring that all parties can easily understand their rights and obligations.
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FAQ

An advisor may receive between 0.25% and 1% of shares, depending on the stage of the startup and the nature of the advice provided. There are ways to structure such compensation to ensure that founders get value for those shares while retaining the flexibility to replace advisors without losing equity.

Advisor equity commonly ranges between 0.10% and 0.25% for a (typical) two-year engagement. In unusual circumstances it can be much higher: 1% or more. Generally I think it's a bad sign if an advisor expects too much equity.

Advisory shares are financial rewards usually issued as common stock options to company advisors. The options typically vest monthly over 1-2 years on a vesting schedule with 100% single-trigger acceleration and no cliff.

Vesting. Vesting for advisor grants is typically monthly without any cliff. I advise clients to determine a certain number of monthly basis points that you think someone is worth, then grant them 12-24 months worth of options at this rate that would vest monthly over that same period.

An advisory agreement should be used between a company and its advisor. The agreement sets forth the expectation of the relationship like work to be performed on behalf of the advisor and compensation. The agreement should also set forth certain key terms like confidentiality and assignment of work product.

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Advisory Agreement Template With Vesting