The team at Badass Advisors have put a lot of time into thinking about this (see this Medium post: https://medium.com/@markgee/advi... ).
That said, I have mixed feelings about this product; as I’m not really a fan of these ‘calculators’ that tell you how to split equity amongst co-founders, or how much equity to give an employee/advisor. I think that there are too many variables involved and every person is different.
I think that it’s good for people to have points of reference before making any decision like this. I just wouldn’t take whatever number comes out as the exact ‘right’ figure. Treat it as a guideline.
@natelegler@_jacksmith Bingo! The data online is crazy old..valuations and deal types have changed a lot in the past 5 years :) That said we are getting these legacy authors/authorities onboard with our approach and look forward to sharing that soon
Agree with @_jacksmith here. No calculator can be determine the equity you should give to advisors. But of course it can give you a few variable bases to go from.
Advisors come and go in all shapes and sizes. One may not have a main intention to introducing you to people, but you're at a party with them and all of a sudden you end up meeting someone via them. Do you have to go back to the calculator and re-negotiate?
No calculator will be able to put the % value of an advisor accurately. It is for you to determine. This calculator offers a few inputs but there should be many more for such a decision.
But as said before, this isn't meant to be taken as completely accurate.
@bentossell Thanks Ben, spot on. For many startup folks, running a few sentiments through this calculator is a great way to start* the conversation with an advisor, versus finish it. Otherwise you have founders asking founders, "how much should I give ______," and any kind of objective measure is thrown out the window.
I agree with Ben and Jack. I upvoted it though because they don't try to confuse anyone with what their thing does: they say it outright in their pitch: "Calculator TO HELP work out how much equity to give advisors" (I've capitalized the verb that did it for me!) It's just meant to help, not to dictate an outcome!
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