A major problem facing graduate`s 4,500 companies and 18,000 mentors from the founding institute is collusion with a consultant agreement. We`ve literally gotten hundreds of consultant agreements to check – and everyone is different. And one of the biggest problems many startups face is a well-defined agreement for consultants working for a new company. No one was able to get the exact format on how to reach a fair agreement. That`s why the founding institute developed the FAST agreement model for entrepreneurs. As an entrepreneur, of course, you want to compensate consultants for the time they spend supporting your business. But you have no idea how much equity you need to offer the advisor for their support. This and once you have agreed to the initial terms, you will quickly be inundated with legal documents, including options, legal arrangements and more. The terms of the FAST agreement are outlined at these three fundamental levels of the idea, the startup and the growth phase and vary according to the commitment of each advisor in the company. Many proposals on the level of capital for the allocation of individual advisors come from anecdotal experiences. But at Carta, we have data that gives a real insight into what`s really going on. So we looked at consulting actions that were issued in 2019 for companies that raised less than $2 million.
Here are the most common agreements we`ve seen: No matter what decision you make with your advisor, make sure you document the agreement. Especially when it comes to equity or you promise. We recommend talking to a lawyer and working with your potential advisor on an agreement that works for everyone. At the end of the day, it`s about how to use the counsellor. You have to tell them what you need and what you expect. Find someone who can be a resonance that can help you turn your business around. As soon as you get the idea of what you`re looking for, contact your network. Ask former colleagues, current investors and other founders for recommendations. Explore your market and find experts who are helpful.
Sometimes a successful relationship can start with a personalized LinkedIn message or a cold email. A FAST Consultant Agreement is a simple and short contract by which a person acts as a mentor or advisor for a company.