Topic
Consulting for Equity
Roland Frasier uses Consulting for Equity to trade advisory work for an ownership stake instead of dollars for hours. The model turns consulting into an ownership position, with advice paid for in equity.
Common questions
What is Consulting for Equity and how does it work?
Trade advisory / fractional consulting for an equity stake instead of dollars for hours.
What goes in a consulting for equity agreement?
The type of equity (an option, phantom equity or a profits interest rather than straight shares), a hurdle set at today's fair value so the advisor only shares in value above it, vesting tied to time, a service, a performance target or an event, KPIs that are leading indicators, and change of control terms such as accelerated vesting, ride along rights and a put.
How much equity should a consultant or advisor get?
Match the equity to the effort and the impact. Advisory work, a few meetings a year, earns a small stake. Performance work that doubles or triples profits earns a larger one. Before any percentage, check that the value the advisor brings is a clear multiple of what you give up, ideally five to ten times.
