Adviser agreement with equity for a startup

Startups pay advisers in equity because they have no cash, and an adviser agreement with equity has two documents inside it: a consultancy agreement for the advice, and an equity arrangement that has to be granted properly, vest over the period of the advice, and survive the scrutiny of the next investor. Advisers who are not employees cannot use the tax-advantaged option schemes, the percentages are small and the vesting is what protects the company from paying for advice it stopped receiving. I draft that agreement, for the company or for the adviser, for a fixed fee of £595, delivered in five working days.

Who this is for

Founders in England and Wales bringing in an adviser for a slice of equity, and advisers offered equity by a startup who want the arrangement documented so that it is worth something.

What matters in an adviser agreement with equity

The advisory services and commitment

The agreement should define what the adviser does (introductions, strategy sessions, availability to the founders, help with fundraising or hiring) and the commitment in hours a month, so that the equity is earned for something identifiable; the adviser is an independent consultant with other interests, not a director, officer or employee, with no authority to bind the company, and the agreement should say so with section 251 of the Companies Act 2006 in mind for an adviser the founders defer to.

The equity, vesting and departure

The agreement should state the equity as a percentage of the fully diluted capital at the date of grant or a number of shares or options, vest it over the advisory period (commonly a year or two, monthly after a short cliff), provide that unvested equity lapses when the engagement ends for any reason, and say what happens to vested equity on departure and on an exit; acceleration on an exit is a commercial choice the agreement should make expressly, and the next investor will read it.

Options, shares and the corporate steps

Equity is granted by an option agreement or a share subscription, not by the adviser agreement alone, and the company needs the corporate authority to do it: authority to allot under section 551 of the Companies Act 2006 and any disapplication of pre-emption rights, consents under the shareholders' agreement or articles, and filings at Companies House for shares issued; an adviser agreement that promises shares the company cannot allot without a shareholder vote it has not held promises a dispute. Growth shares or a separate class may suit, and the agreement should cross-refer to the equity document that is used.

The tax position for an adviser who is not an employee

Enterprise management incentive options and the other tax-advantaged schemes are for employees and directors, so an adviser receives unapproved options or shares, with income tax on the value received for services and, for shares, the restricted securities rules in the Income Tax (Earnings and Pensions) Act 2003 and the election under section 431 of that Act to consider; the agreement should say that the adviser is responsible for their own tax and should take advice, and the company should take its own on the accounting and any reporting obligations. Tax advice is outside the drafting.

Intellectual property, introductions and the Bribery Act

Advice, documents and introductions the adviser provides should be the company's to use, with any materials assigned under section 90 of the Copyright, Designs and Patents Act 1988 and the adviser's own frameworks retained; where the adviser introduces investors or customers, the agreement should say whether any additional fee is payable and ensure that nothing is offered to a counterparty's staff that the Bribery Act 2010 would catch. Introductions to investors should not amount to the adviser arranging investments, which is a regulated activity under the Financial Services and Markets Act 2000 if carried on by way of business.

Confidentiality, conflicts and the investor view

The adviser should keep the company's information confidential, disclose interests in competing businesses and recuse where they conflict, and be free to advise others; the agreement should be in a form an investor will accept at the next round, with a reasonable total advisory pool, vesting that protects the company, no anti-dilution protection, and a liability limit for the adviser tied to the value of the equity received, tested under section 11 of the Unfair Contract Terms Act 1977.

What it costs

Consultancy or contractor agreement, £595. Drafted for your business. Five working days.

Template set for repeat use, £895. One master agreement plus a short-form schedule you can reuse for every engagement. Five working days.

Buying online forms the engagement on payment. The scope is what the consultancy and contractor agreements page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A clear, express assignment of intellectual property to your business
• Confidentiality provisions that protect your business information
• Restrictive covenants drafted at a scope a court will uphold
• Clear treatment of status, so the arrangement is not accidentally something else
• Payment, deliverables and termination provisions that match how you work
• A reusable structure, so the next engagement costs you nothing

What is not included

• Employment status determinations and off-payroll working assessments, which need your accountant
• Tax advice
• Disputes with a contractor you have already engaged
• Immigration and right to work compliance

Questions I am often asked

How much equity should an adviser get?

Small fractions of a percent to a low single-digit percentage, depending on the adviser's involvement and the stage; the agreement documents whatever is agreed with vesting that stops the equity accruing when the advice stops. The percentage is a commercial decision the drafting records.

Can we give an adviser EMI options?

Not unless they are an employee or director meeting the scheme's conditions. Advisers receive unapproved options or shares, with a different tax treatment on which both sides should take advice.

The adviser stopped responding six months in. Do they keep their equity?

The vested part, as the agreement provides; the unvested part lapses when the engagement ends. Monthly vesting after a cliff is what limits the cost of an adviser who drifts away.

Related guidance and services

• Consultancy and contractor agreements, £595, the service this page describes
• Shareholders agreement, £995
• Contract review, £495
• Consultancy agreement for a non-executive adviser
• Advisory board member agreement

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.