I'm working out an equity agreement for an advisor. One of his responsibilities is to introduce my team to potential investors. The advisor wants additional compensation if he successfully raises funds. How much should I offer? A percentage of what's raised?
I happen to be in your same shoes with my business.
I'd say you've started well with the base equity. I'm also doing that along with a percentage (say 10% of any funds attracted) shared among all advisors.
More like an equity pool and additional pool from investment money.
Keeps everyone committed in the business.
First, estimate your total expenses
Secondly, calculate the capital for the investing and the profit.
Above all, read across your company policy and find out how much you can give to advisor and if you dont have one, establish a valuation for your company and build an investor pipeline for your next round.
Hope this helps.
5% - 15% depending on his/her/their value contribution. Higher if the client had no ties to you and is brought on board solely for the advisor's efforts. Also, depending on existing remuneration structures, higher if advisor is on a success fee model with only costs and a small retainer - lower if on a reasonable monthly fee.