QUESTION:
I´m looking for a tempate to formalize compensation for a Scientific Advisor for a project I´m working on — Harvard Med School Prof.
ANSWER:
Eric Ferraro
by Eric Ferraro at Bullivant Houser Bailey PC
You will need an Advisory Services Agreement with your prospective advisor. As with any arrangement that needs to be documented by a written contract, asking for a “template” may be asking for trouble. There is a wide range of approaches to memorializing an advisory agreement like this, and you need to make sure a contract is customized to the specific terms agreed upon between you and your advisor. There are some basic “boilerplate” provisions that will probably be in any consulting agreement of this sort, including terms that specify that this is an independent contractor relationship. You can easily find examples of this type of agreement on the Internet, but I would recommend that you consult with a business attorney for purposes of making sure that the final agreement is well tailored to your specific arrangement.
by Naomi Kokubo
As Eric mentions above, asking for a “template” may be asking for trouble. That said, I’m providing a template that one of our members submitted. I recommend getting a lawyer to draft your own agreement, but this should give you some idea of what an Advisory Agreement typically contains.
Advisory Template in MS Word:
https://www.foundersspace.com/wp-content/uploads/advisor_agreement.doc
Advisory Template in PDF:
https://www.foundersspace.com/wp-content/uploads/advisor_agreement.pdf
I hope this helps!
One thing to remember well when signing up Advisors is being clear yourself what you need from them. It might be worthwhile keeping it very structured by saying that:
* We will meet once a quarter for 3 hours.
* Agenda will be emailed in advance with the topics we need advice on.
* For this you will be compensated with X% equity to be vested each year on completion of that year’s advisory meetings.
* Missing more than 2 meetings a quarter, we have the right to replace you with another advisor or some such thing. Advisors get busy, they do other things and so it’s only fair that they do not string you along and you do not pay for advice not rendered.
In a pre-funded venture, a good rule of thumb is to give advisors 0.25 percent equity in the venture. Of course, this number can vary depending on the adivsor´s experience, commitment, reputation, and value to the company.
You can also give the advisor monetary compensation. Typically a few thousand dollars a year in addition to equity is typical. The reason to give money is that people tend to have a higher level of commitment when they are getting paid, even if it´s a small amount.