What Are Advisory Shares? How Do They Operate?

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A Form Of Stock Options

Advisory shares, a form of stock options, are granted to startup advisors in lieu of cash compensation

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Startup advisors, often industry experts and professionals, receive advisory shares to contribute strategic insights

Startup Advisors

Two primary types of advisory shares are Restricted Stock Awards (RSAs) and Stock Options

Two Primary Types

Advisory shares operate by giving advisors the option to purchase shares rather than receiving them outright.

Purchase Shares

Stock options will typically vest in a couple of years. This allows the company to delay the transfer of ownership to the advisors