What is the average compensation for a Board of Directors member who is not an investor?


1

I'm looking to ask someone to be on the board of Directors for my startup. The compensation can be money, stock, or a percentage.

Update: I'm looking for someone to guide me on the business side of things that I don't have experience in. Looking at the answers below, I might be looking for Board of Advisors instead.

Board

asked Jan 26 '10 at 10:05
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Hoang
21 points
  • I think it depends a lot on what you want them to do. Can you update the question with a little more detail on your expectations? – Steve Wilkinson 9 years ago

2 Answers


1

Since no one has chimed in here yet, I'll reference my handy copy of Four Steps to the Epiphany (page 102, table 4.2: Advisory Board Roles). It's a long table, so I'll summarize:

Role, how many, how much to pay;

Technical, as many as needed, enough to get key ones to answer the phone and return email;

Business, no more than two or three at a time, whatever it takes (no more than board members);

Customer, as many as needed, enough to get key ones to answer the phone and return email;

Industry, no more than two per industry, for the naive ones ~5k shares; for others, negotiate;

Sales/marketing, one for sales, one for marketing, for the naive ones ~5k shares; for others, negotiate;

Again, this is Steve Blank writing about the enterprise software business. I think he mentions somewhere a million shares or so, so ~5k shares might be 0.5%.

Also note the difference between an advisory board and a board of directors. Someone will correct me if I'm wrong, but the advisory board helps you get everything right while building the company. The board of directors will probably only be the equity holders.

answered Jan 26 '10 at 22:16
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Frederick Cook
301 points

0

I have never given board members direct compensation, just Non-Qual stock grants with accelerated vesting (usually two year - quarterly, no cliff). I haven't paid travel costs either, though you could if you thought it would help attract someone.

My feeling is that the right board member will be passionate and interested in your company without cash compensation.

answered Jan 27 '10 at 00:58
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Rs Holman
596 points

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