When establishing a relationship between a startup and an advisor, it’s crucial to have a clear, mutually beneficial agreement in place. This agreement outlines the terms of the advisory relationship, including the role of the advisor, the compensation, confidentiality, and the duration of the agreement. Below is a comprehensive template for a startup advisor agreement, designed to protect both the startup and the advisor while fostering a productive and successful collaboration.
Startup Advisor Agreement
This Startup Advisor Agreement (“Agreement”) is made and entered into on DATE by and between [STARTUP NAME], a [STATE/COUNTRY] corporation with its principal place of business at ADDRESS, and [ADVISOR NAME] with an address at ADVISOR ADDRESS.
1. Introduction
WHEREAS, the Company is a [BRIEFLY DESCRIBE THE COMPANY AND ITS BUSINESS]; WHEREAS, the Advisor has [BRIEFLY DESCRIBE THE ADVISOR’S Background AND EXPERTISE]; WHEREAS, the Company wishes to engage the Advisor as an advisor to the Company, and the Advisor is willing to serve in such capacity, on the terms and conditions set forth in this Agreement.
2. Term
The term of this Agreement shall commence on the Effective Date and continue for a period of [LENGTH OF TIME, e.g., one year] from the Effective Date, unless terminated earlier as provided in Section 7 (Termination) below.
3. Role and Responsibilities
During the term of this Agreement, the Advisor shall: - Provide guidance and advice to the Company on matters related to [SPECIFIC AREA OF EXPERTISE]. - Attend [NUMBER, e.g., up to four] meetings per year, whether in person or via teleconference, as reasonably requested by the Company. - Be available to provide information and answer questions related to the Advisor’s area of expertise. - Participate in strategic discussions and provide input on key decisions as requested by the Company.
4. Compensation
As compensation for the Advisor’s services under this Agreement, the Company shall: - Grant the Advisor [NUMBER] stock options to purchase shares of the Company’s common stock at an exercise price of [PRICE] per share, vesting over [VESTING PERIOD]. - Pay the Advisor a consultancy fee of [AMOUNT] per year, paid in quarterly installments of [AMOUNT] on [SPECIFY DATES, e.g., January 1, April 1, July 1, October 1].
5. Confidentiality
The Advisor agrees to maintain the confidentiality of all proprietary and confidential information of the Company (“Confidential Information”) that the Advisor receives or has access to during the term of this Agreement. The Advisor shall not disclose any Confidential Information to any third party without the prior written consent of the Company.
6. Intellectual Property
The Advisor assigns to the Company all right, title, and interest in and to any inventions, ideas, discoveries, or improvements, whether or not patentable, that the Advisor conceives, makes, or develops during the term of this Agreement and as a result of the services performed under this Agreement.
7. Termination
Either party may terminate this Agreement upon [NUMBER, e.g., thirty] days’ prior written notice to the other party. Upon termination, the Advisor shall return all Confidential Information and other property of the Company to the Company.
8. Representations and Warranties
Each party represents and warrants that it has the power and authority to enter into this Agreement and that this Agreement does not conflict with any other agreement to which it is a party.
9. Dispute Resolution
Any disputes arising out of or related to this Agreement shall be resolved through [SPECIFY DISPUTE RESOLUTION PROCESS, e.g., binding arbitration in accordance with the rules of the American Arbitration Association].
10. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the [STATE/COUNTRY], without giving effect to any principles of conflicts of law.
11. Entire Agreement
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.
12. Amendments
This Agreement may not be amended or modified except in writing signed by both parties.
By signing below, the parties acknowledge that they have read, understand, and agree to be bound by the terms and conditions of this Agreement.
Company:
Signature: ______________________________ Name: ______________________________ Title: ______________________________ Date: ______________________________
Advisor:
Signature: ______________________________ Name: ______________________________ Date: ______________________________
What is the purpose of a startup advisor agreement?
+The purpose of a startup advisor agreement is to establish a clear understanding between a startup and its advisor regarding the advisor’s role, responsibilities, compensation, and other essential terms of their relationship.
How is an advisor typically compensated in a startup?
+An advisor in a startup is often compensated with a combination of consultancy fees and stock options or equity. The specific compensation arrangement can vary widely depending on the startup, the advisor’s expertise, and the level of commitment.
Why is confidentiality important in a startup advisor agreement?
+Confidentiality is crucial because advisors often have access to sensitive and proprietary information about the startup. Ensuring that this information remains confidential is essential for protecting the startup’s competitive edge and complying with legal and regulatory requirements.
Can a startup advisor agreement be terminated?
+Yes, a startup advisor agreement can be terminated by either party, typically with a specified period of notice. The agreement should outline the conditions and process for termination to ensure clarity and minimal disruption.
What kind of disputes can arise from a startup advisor agreement, and how are they resolved?
+Disputes can arise from issues like compensation, confidentiality, or the advisor’s role and responsibilities. These disputes are often resolved through arbitration or mediation as specified in the agreement, aiming for a resolution that respects the interests of both parties.
