Board & NED Compensation Calculator

An Advisor provides strategic guidance on an ad-hoc basis without fiduciary duty or voting power. A Non-Executive Director (NED) or Independent Board Member formally sits on your Board of Directors, holds voting rights, has a fiduciary duty to the company, and takes on legal liability. Because of this liability and formal involvement, NEDs require higher compensation (D&O insurance is also a must).

At the Pre-seed and Seed stages, advisors and board members are almost exclusively compensated in equity. Once a company reaches Series A or B and has sufficient capitalization, independent board members usually transition to receiving an annual cash retainer (often $20k - $50k) alongside a smaller equity grant to cover their time and liability risk.

For Advisors, the standard is a 2-year vesting schedule with no cliff, vesting monthly. For Board Directors, the standard aligns closer to employee grants: typically 3 to 4 years, often with a 1-year cliff to ensure they are a good fit for the board before their equity permanently vests.

They are usually the same thing mechanically. Advisors and NEDs are typically granted Non-Qualified Stock Options (NSOs) from the company's standard employee option pool. Ensure your option pool is large enough to accommodate board members before closing a funding round.