what is advisory shares

what is advisory shares

1 year ago 41
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Advisory shares, also known as advisor shares, are a type of equity compensation given to company advisors in exchange for their time, expertise, strategic insights, experience, and network. They are typically financial rewards in the form of stock options. Advisory shares are often used as incentives for advisors to invest in a companys long-term success. They are usually granted to startup company advisors in lieu of cash compensation. Advisors who receive advisory shares are usually businesspeople with previous experience as company founders or senior executives. Advisory shares come in two varieties: stock options and restricted stock units. Restricted stock units (RSUs) are shares bought upfront, while options are the right to buy shares, which are usually delivered later on. Advisory shares are usually subject to vesting for the duration of the working relationship. Vesting is the process of "earning" the shares over time, which encourages advisors to stay with the company for longer. Advisory shares are often used as a way to compensate advisors, consultants, and other experts who provide valuable insights and guidance to a startup, typically in the early stages of growth.

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