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how much share we can offer to mentor?

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We are a service based company. Currently we are working on SAAS based product and planning to go live in a year time. A senior faculty from reputed engineering college is associated with us on non-profit basis since we started. His role is kind of mentor and he is not part of execution. His is good in people networking as well as legal stuff and also has vast experience in some technology area which might helpful to us in long run. So, we are planning to offer him some share in our company, which will benefits him on long run. Need advise on how much percentage we can offer him? considering his role will be kind of a mentor, a communicator and a legal as well as technology consultant whenever we need help and he is not going to make any investment in our company.

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4 Answers



  1. AnkeshKothari.com on Sep 03, 2010 Reply

    Most people give their advisors or mentors about 1-2% share. But it could go as high as 5% if the mentor is really helpful in connecting you with influentials or helps in getting more sales.

    But the average is 1-2%.

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  2. cloudy on Sep 04, 2010 Reply

    @Ankesh – Thanks for your answer. What if the person can create a long term values by mentor-ship, strategic leadership, technology consulting, quality recruiting and bringing new business? What will be the % share in such case?

    Do you think, to give incremental equity is an option? If so, how we can go with it?

    and what if the person ready to join full-time? What will be the % share in such case?

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  3. Sridhar Turaga on Sep 05, 2010 Reply

    IF you see value and you decide to compensate your advisor … it is always recommended to
    1. Formalise the role in writing stating what you are expecting from him/her … even if it is not a legal document and just a one page “Our expectations …”
    2. Limit the role as well as any compensation for a year and renew at the end of the year … as your requirements for advice / contacts change over time, you may out grow your advisor or your advisor may not add value as you expected

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  4. cloudy on Sep 21, 2010 Reply

    I got some advise to have following options to consider.

    (1) To offer independent directorship and monthly 5k to 25k as consultant fees.

    (2) Profit sharing
    - for new contact & business reference 2.5% of project cost
    - for new contact, business reference and get the deal through 3.5% to 5% of project cost
    - for new contact, business reference, get the deal through and involvement in entire project execution cycle 5% to 8-10% of project cost

    (3) Fixed equity: up to 5% depend on contribution.

    (4) Equity based on decided goal, 2% as a start and then renew at the end of year based on contribution.

    Thanks to all for their valuable advise. Hope this info will helpful to others.

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