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Are Advisors Valuable?

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Based on Jason Calacanis's startup checklist.

What advisors are — and aren't

Advisors are not full-time employees. They typically offer a few hours a month: answering specific questions, opening doors, pressure-testing decisions, or sharing pattern-matched experience from having built companies before.

The value they provide is leverage — access to hard-won knowledge without the overhead of a full hire.

The core questions to answer before bringing one on

  • Can you find experienced people who genuinely believe in what you're building?
  • Will they provide insights that are actually valuable — not just validating?
  • Are the insights worth a stake in your company?

What advisors are typically paid

Equity, not cash. The standard range is 0.1% to 0.3%, sometimes described as "a few basis points." This is enough to create alignment without meaningfully diluting the cap table.

Reference document: the Founder Institute's FAST Agreement (Founder / Advisor Standard Template) is the standard framework for structuring advisor relationships. It covers equity amounts, vesting, and expectations.

Originally developed to help Founder Institute programme participants set up advisory boards, it was released publicly in 2011 and updated to Version 2 in August 2017. The key improvements in V2:

  • Can be localised to any jurisdiction where corporate law supports options or restricted stock — no lawyer required
  • Advisor commitment levels simplified and standardised
  • Signing process simplified
  • Enforceability improved

The FAST Agreement is designed to remove the administrative friction from the founder-advisor relationship so both sides can focus on the work rather than the paperwork.

Is it worth it?

The goal is for at least one advisor to provide enough compounded value — introductions, insight, credibility — to justify having them on board. A good advisor in the right domain can compress years of learning into a single conversation.

A bad advisory relationship is just equity out the door. Don't add advisors as a credential signal. Add them when you have a specific gap they can fill and confidence they'll actually show up.