Attracting a venerable group of advisors is a crucial step for startups and emerging growth companies. It may feel like a daunting task to ask a potential advisor to sign an Advisor's Agreement. However, setting clear expectations from the beginning will go a long way to creating an accountable, transparent relationship with this new advisor. Esteemed advisors know that as a startup, you are strapped for cash. Don't fret. Many advisors will look at the opportunity as a whole to see if this relationship can provide something other than cash in return for their services (i.e. networking opportunities or contributing to a particular field). In any case, one of the most popular ways of attracting a top-notch advisor is by offering equity in return for advisory services.

Regardless of the way you compensate your advisors, you can customize the kind of relationship you have with any advisor by drafting a proper Advisor's Agreement. Here are some things to consider when defining the expectations:

  • Ensure the advisor understands that an employment relationship is not being created, and include that in the Advisor's Agreement.
  • Express the role of the advisor by setting out a mutually agreeable set of tasks in the form of "Services" they will provide.
  • Limit the advisor's ability to delegate the agreed upon services. You are asking this particular advisor to perform the agreed upon services. This is a simple way of making this clear from the beginning.
  • Predetermine a minimum number of advisor meetings and write it out in the agreement. Your potential advisor will likely be on the go constantly, so it is important that meeting frequency is clear from the outset.
  • Attention IP heavy startups, you know who you are! Ask your advisor to sign a robust IP & Confidentiality Agreement in conjunction with the Advisor's Agreement. You want to make sure you can be transparent with your advisor on all issues, and IP is definitely no exception. A strong IP agreement will make sure ownership of IP remains with your startup.

About Dentons

Dentons is a global firm driven to provide you with the competitive edge in an increasingly complex and interconnected marketplace. We were formed by the March 2013 combination of international law firm Salans LLP, Canadian law firm Fraser Milner Casgrain LLP (FMC) and international law firm SNR Denton.

Dentons is built on the solid foundations of three highly regarded law firms. Each built its outstanding reputation and valued clientele by responding to the local, regional and national needs of a broad spectrum of clients of all sizes – individuals; entrepreneurs; small businesses and start-ups; local, regional and national governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities.

Now clients benefit from more than 2,500 lawyers and professionals in 79 locations in 52 countries across Africa, Asia Pacific, Canada, Central Asia, Europe, the Middle East, Russia and the CIS, the UK and the US who are committed to challenging the status quo to offer creative, actionable business and legal solutions.

Learn more at www.dentons.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.