How to Compensate Advisors in Startups and SMEs: Real Figures & Global Benchmarks

As a founder or business leader, bringing in the right advisor can accelerate funding, international expansion, or go-to-market execution. But how should you compensate someone who isn’t a full-time employee—yet plays a critical role in your growth?

Here’s a concrete, data-driven guide to advisor compensation specifically for startups, scaleups, and SMEs—no big corporate boards, no financial advisors, just people helping companies grow and go global.

⚙️ 1. Equity is the Default Currency—Especially Early

Across both the U.S. and Europe, equity is the most common way to compensate early-stage advisors. It aligns incentives and conserves cash—especially when budgets are tight.

📌 Typical Equity Ranges (based on real-world data)

Advisors providing strategic introductions, investor access, or market entry know-how often land at the upper end of the range. For light-touch advisors (e.g., 1 call/month), 0.1–0.25% is more typical.

💶 2. Europe: Equity + Cash Is the Norm

Unlike the U.S. where equity-only deals are common, European advisors often receive a blend of equity and cash. This is especially true for advisors working several hours monthly or taking on active roles.

💰 Typical Compensation Structures in Europe

• Equity: 0.2–0.5% common for early-stage, slightly lower at Series A+

• Cash: Monthly retainers: €500–€2,000

Example: A B2B SaaS scaleup in Germany hired a go-to-market advisor for DACH expansion at €1,000/day + 0.25% equity vested over 18 months.

⏳ 3. Vesting Schedules: Aligning Long-Term Value

Most advisor equity is vested over time, typically:

• 1–2 years total

• 3–6 month cliff before anything is earned

• Often monthly vesting after the cliff

Vesting ensures commitment. For milestone-based contributions (e.g., helping close a funding round), equity can vest faster or be tied to delivery.

“We agreed on 0.5% equity over 18 months, with 0.25% vesting if we close our Series A by the end of Q2.” — Seed-stage founder, Netherlands

🧠 4. What Actually Affects the Equity %?

Here’s what pushes an advisor toward the high or low end of the range:

📝 5. Formalize with Simple Legal Tools

Use advisor agreement template like:

• FAST Agreement (Founder Institute)

That include clauses for:

• Vesting

• Cliffs

• IP transfer

• Confidentiality

• Termination

Also check local rules on taxation of equity and contracts (e.g., France requires more formal board approvals).

🔍 6. Sample Deal Structures

💸 7. Revenue Share Models: When Advisors Drive Business

When the advisor’s main role is to open doors to clients, close deals, or drive revenue, a revenue share model may make more sense than (or complement) equity.

This aligns incentives directly with outcomes and is commonly used for:

• Sales channel development

• Market entry support

• Partnership building

• Customer introductions that lead to deals

🔄 How Revenue Share Works

Instead of—or in addition to—equity, the advisor receives a percentage of revenue they help generate. This can be structured as:

Example: A Finnish healthtech startup agreed to pay an advisor 10% of revenue from any client the advisor personally introduces and helps close, for a period of 12 months after the introduction.

🔐 Safeguards to Include

• Define what counts as a qualified lead or active contribution (e.g., advisor must join sales meetings).

• Include time limits (e.g., advisor receives rev share for 12 months post-introduction).

• Optionally cap total payout per client.

• Avoid “passive rev share forever” unless the advisor is deeply embedded.

🧩 Equity + Revenue Share: Can You Mix?

Yes—many companies do. For example:

Mixing equity and revenue share is powerful when an advisor:

• Has deep industry connections

• Can produce short-term revenue gains

• Is not committing full-time

✅ When to Choose Revenue Share Over Equity

✅ 7. Best Practices for Startups

1. Start with a small, high-value advisor group (1–3 people max)

2. Tailor compensation to the advisor’s value:

   • Use equity for strategic, long-term contributions

   • Add cash or retainers for time-intensive roles

   • Offer revenue share if the advisor drives direct business results

3. Protect your cap table with 1–2 year vesting and 3–6 month cliffs

4. Link rewards to milestones (e.g. fundraising, client wins, market entry)

5. Be clear on expectations—structure agreements with defined deliverables and outcome triggers

6. Mix compensation types where appropriate (e.g., 0.25% equity + 8% revenue share for clients brought in)

🎯 Final Thoughts

Advisors can accelerate your growth, funding, and international expansion—but only if expectations and compensation are clearly aligned.

• For strategy, credibility, or networks → 0.1–0.5% equity

• For hands-on support → add cash or retainer

• For client introductions and BD → consider revenue share (e.g., 5–10% of deal value or client revenue)

The best advisor compensation aligns value delivered with company stage and engagement level. Whether you’re offering 0.25% equity over 18 months or a 10% cut of new revenue, the key is clarity, fairness, and shared success.

👉 And remember: you don't have to figure it out alone. The Boardio team is happy to help you brainstorm and structure the right compensation model for your needs—just reach out, and let’s talk it through.