Startup advisory board: build a portfolio, not a committee

The advisors who gave me the most refused to be paid.

At Plurilock, the people on our startup advisory board who delivered the most value were the ones who turned down stock options. Their reasons varied. Some wanted me to succeed, some believed in the mission, and some had spent careers in jobs the thing we were building would have made easier, and wanted to see it exist. None of them wanted a grant.

What they gave me was credibility, access to talent, and a fast way into niche topics. The credibility mattered most when we were new in a space with no track record to point at, which is the situation a startup advisory board is for. The talent came because the people worth hiring are usually already known to someone in the room.

That is an awkward fact to build a compensation model on, and a confounded one. The people who refused were also the people with the deepest networks, so refusing equity and delivering value probably share a cause. Equity is still worth granting. Price it as payment for advice, though, and you end up with a committee waiting to be invoiced.

The question that started all of this came from a hardware defense-tech founder who asked how you scale a workforce when you cannot afford to hire. My answer was that you build an advisory ecosystem and run it like a portfolio: a few concentrated positions, a long tail of small ones, and an annual look at both.

Equity buys belonging, not advice

Most people want to feel like they are part of the team, and equity does that in a way cash cannot. Cash reads transactional, and at an early stage the cash you can offer is too small to move anyone’s decision. Equity is the strongest instrument on the table for saying you are inside this with us.

Perceived value splits on one variable, and it is not seniority or wealth. It is whether the person has previously made money through ownership. People who have had a startup or a business pay out place a high value on a grant. People who have only ever been paid a salary discount it, sometimes to zero. Two advisors with identical resumes react to the same offer differently, and working out which one you are talking to first saves you both a bad conversation.

That split applies to employees too. It is the best predictor I have found of who will care about an option grant and who would rather have the cash.

Decide the shape before you decide the numbers

Founders run this backwards, starting from a percentage and working out who to give it to. The picture I use puts the founder in the middle. The executive team and the board of directors sit as two semicircles around them, and the advisory ecosystem is an outer ring around all of it.

That ring is the widest part of the company, and the only part of it I ever grew without payroll. It is also the part where one conversation can add decades of relationships.

I did not invent the shape. Mike McConnell had a working network of this kind around Cyber Florida in Tampa, and almost none of it lived in the formal structure. The value was in who he could get into a room together. The relationship with Mike made everything else a lot easier.

The outer ring is an audition

An advisory relationship lets you watch someone work before either side commits to anything.

Start small on purpose: one question, one introduction, a call a quarter. Inside a year you learn things no reference check produces: whether they answer, whether their advice held up, and how they treat your team when you are not in the room. Only then do you have a basis for the bigger decision, which might be a strategic advisory role, an operating job, or a seat on the board. It runs both directions, since a year of small interactions tells them more about you than any pitch would.

Run the ring as a candidate pool and a bad pick costs you a couple of calls instead of a board seat.

A few big bets on one end, a long tail on the other

Allocation is a barbell. A few anchors on one end give you a lot of their time and stay for years. A broad specialist network on the other end takes one call a year about one precise question.

Anchors carry general knowledge about you and the company, and the tail carries specialized knowledge you could never justify keeping on staff. The tail is paid almost nothing, and what holds it together is that one well-aimed question a year is a pleasure to answer.

Four levers move people, and they land differently at the two ends:

• Cash. Works at the tail for a bounded piece of work. It corrodes the anchor end, where it converts a relationship into an invoice.
• Equity. The anchor instrument. Concentrated, long-dated, and only meaningful to someone who believes there will be an outcome.
• Belonging. Free, and the most underrated of the four. Briefings before the market gets them, a real seat at the annual meeting, being asked first.
• Targeted performance pay. Paid for a closed outcome, never for effort or availability.

The performance lever has a useful reference point outside startups. Brent Beshore’s fund runs a scout program paying network members for sourcing deals that close, reportedly more than $100,000 on a closed deal plus $25,000 earmarked for a trip. The scouts are lawyers, accountants and bankers, people with deal flow rather than operating skill, and the fund charges no management fee, so there is nothing to pay them out of except outcomes.

Set a pool, not a per-advisor rate

Set the pool before you pick the people. I set aside roughly five percent for the whole ecosystem and allocated inside that envelope. About two percent went to the top anchor, about one to the next, then small amounts down a long tail of specialists. Treat those as directional, since the shape depends on how many genuine anchors you have.

Published guidance works the other way around. The reference document is the FAST (Founder/Advisor Standard Template) agreement from Founder Institute, first published in 2011 with a v3 in 2026 and widely misattributed to Y Combinator, which publishes no such thing. It is a rate card: look up company stage and engagement level, read off a number. Carta’s data, as reported, puts the median pre-seed advisor grant near 0.21 percent, with only around ten percent of advisors ever receiving one percent or more.

	Rate card (FAST) and observed market (Carta)	Barbell
Unit of decision	One advisor at a time	A total pool, then allocation
What it prices	Engagement level, meetings per month	Concentration, how much you bet on one relationship
Top grant	1.00% at pre-seed, expert tier	Roughly 2%, for a true anchor
Long tail	Reported median 0.21%, same terms for everyone	Small grants, terms scaled down
Vesting	Two-year vest, three-month cliff	Annual re-grant instead of one long vest
Breaks when	You have one exceptional relationship	You have no anchors and spread evenly

My tail sits at roughly market rate, and only the anchor grants are unusual, because a rate card has no way to express a bet.

Grant every year so you never have to fire anyone

Annual grants let you top up the people who showed up, keep everyone looking forward to the next one, and stop renewing the ones who did not. The honest reason is that firing an advisor is a conversation most founders never have. Not renewing is a decision you make by doing nothing, and the relationship usually survives it.

You need an NDA and an equity agreement, and both should be short. A non-compete is unreasonable to ask of someone external who is advising you precisely because they are busy elsewhere. I’m not a lawyer, and none of this is legal advice, so have one paper it.

A group of only names underperforms

Doers and names both belong in a group.

Doers often lack the resume that makes an investor nod, but they are the ones who move things, and they like the work itself. Names have the record. The more senior the name, the more likely they got there by surrounding themselves with doers, so they arrive with a working style built for delegation instead of execution.

A group made entirely of names is worse than a smaller one with a mix. You get personality clashes among people accustomed to being the most important person in the room, too many cooks, and very little happening between meetings.

Theranos is the counterexample everyone reaches for. That was a board of directors, so the powers were different, but the composition failure is exactly the one at issue here. That board was spectacular on paper and almost all of it had been purchased for credibility. Little of it was assembled to get work done, and none of it caught what was going on.

The Navy wants to talk to the Navy

Defense carries more tribalism than most industries, and it changes who you recruit. Walk into a US Navy group as an Army person and the conversation stays polite and shallow; walk in alongside a respected Navy figure and it is a different meeting. So a generic defense advisor is no use to you. You recruit one respected figure per tribe you need to reach, and you accept that their credibility does not transfer sideways.

This next part is opinion rather than something I have measured. It generalizes past defense: anywhere trust is issued by a community instead of a job title, you need someone that community already vouched for.

Your best recruiter is a chair with no authority

Referrals are the best source and the best referrals come from the group you already have, so the first few picks do disproportionate work. After that, targeted LinkedIn research once you know which segment you are short on, plus the names already on your board of directors, who tend to be connected in the direction you need. The underrated source is large law firms: every one I have dealt with kept a partner whose job included tracking board and advisory candidates, and those partners made introductions. Accounting firms do the same thing with, in my experience, less useful results.

The move that pays for itself is to appoint a chair and give them a mandate to recruit the rest. Make it an ambassador figure, someone universally respected, and give them no authority to decide anything. Their job is to convene and to recruit.

Governance stays simple: the founder nominates, the board of directors ratifies. It stays founder-centric, because everything here is, but it leaves a legitimate route for other people to surface candidates you would never have found.

The annual meeting is soundbite training

One in-person meeting a year, a state of the union every six months, ad hoc contact the rest of the time.

The annual meeting is the one that matters, and almost none of its value is the advice collected. You are teaching a room full of well-connected people how to talk about your company: what is happening, what is next, and the language that makes it land. They will repeat it in rooms you will never be in.

Match cadence to commitment for everyone else. Some advisors you speak to twice a year. They do not want to hear from you more often, and they are glad to help when the thing you need is the thing they know. Chase them for contact and they stop answering.

Proactive, or peripheral

An advisor who is working sends introductions you did not ask for and tells you what they are seeing in the industry before you read it somewhere. They amplify your messaging, open the doors inside their mandate, and bring you talent. One who only ever responds is fine at the tail of the barbell and is not an anchor.

The red flags are unconstructive conflict, either with the company or between advisors, and assuming authority they do not have. The worst one is representing themselves as internal when they are external, and you usually hear about that from a third party.

Three failure modes account for most of the disappointment I have watched: paying $10,000 a month, which buys a consultant and calls it a relationship; recruiting for names only; and expecting more from someone than their compensation and relationship justify. That last one is the founder’s mistake.

What I still cannot answer is which lever actually did the work, since the advisors who gave me the most took none of the equity this post spends so many words allocating. So I am asking the people who would know, including the advisors who drifted away. I built and ran the ecosystem at Plurilock, and I host Code & Country out of Victoria BC. If you are building a startup advisory board under real capital constraints, I am glad to compare notes.

Frequently asked questions

How much equity do you give to an advisor?

Set the pool first: roughly five percent for the whole ecosystem in my case, spread across an anchor or two and a long tail. That figure is not comparable to the reported market median of about 0.21 percent, which is measured per advisor rather than per pool. The part founders skip is the exit. Annual re-granting makes stopping easy, since you simply do not write the next one. Whatever you already granted still runs on the terms you attached to it, so write those terms with the ending in mind. Settle it in the agreement while everyone is still happy.

What is the role of an advisory board in a startup?

It supplies capability you cannot yet hire, which is usually access rather than advice. A consultant will not bring you introductions, market intelligence or credibility with a specific buyer community, and an advisor can. Treat it as a standing program instead of a fixed body, since the useful composition changes every year as the company does.

How do you compensate an advisory board?

Equity for the few you want concentrated in, bounded cash for everyone else, and no retainers. When someone asks for a monthly fee, the useful counter is a scope: name the piece of work, the end date and the price. That either produces a real engagement or ends the conversation in a week, and both of those are cheap outcomes. With senior people who are no longer optimizing for income, an early briefing and the first phone call do more work than a small cheque. That is the part founders get wrong most often.

What is the difference between an advisory board and a board of directors?

Practically, not legally: directors are elected, vote on company decisions, and carry a legal duty that advisors do not. Advisors sit outside that structure, cannot bind the company, and serve only at the founder’s invitation. I’m not a lawyer, so treat this as how the roles function day to day, not a legal definition, and confirm the specifics with counsel. The tell that matters in practice: an advisor who starts behaving like a director is a problem to address quickly.