19/01/2026
Advisors, Consultants and Contractors — Projecting Forward
Author: Chris Wakeford
Organisation: Raiseworth Capital
Year: 2026
Status: Private & Confidential for IO members ONLY.
Abstract
Determining appropriate equity grants for advisors, consultants, and contractors at the earliest stages of a venture is one of the most misunderstood—and frequently mishandled—decisions made by founders. Conversations framed purely in percentage terms, before any institutional capital, option pools, or valuation benchmarks exist, are often misleading and can distort long‑term outcomes. This paper presents a pragmatic, forward‑projecting methodology used at Raiseworth Capital to anchor early equity decisions in a realistic future capitalisation framework. By working backwards from an anticipated financing event, founders can make disciplined, defensible allocation decisions that preserve alignment, minimise regret, and withstand institutional scrutiny.
1. The Early‑Stage Equity Problem
Founding teams routinely ask a deceptively simple question:
“What percentage of the company should we give to advisors, consultants, or early contributors?”
At formation, this question is almost impossible to answer meaningfully because:
No external capital has yet been priced.
No post‑financing option pool exists.
Share counts are arbitrary and internally defined.
Risk, contribution, and time horizons are highly asymmetric.
Percentages discussed in this vacuum are not only imprecise—they are often meaningless.
At Raiseworth Capital, we discourage static percentage thinking at inception. Instead, we advocate a forward‑projected, pro forma capitalisation approach, grounded in a plausible financing future.
2. The Raiseworth Forward‑Projection Method
The core principle is simple:
Equity granted today should be evaluated based on what it represents after a credible future financing—not before it.
This requires founders to temporarily step into the future and ask:
What capital will we likely need to reach institutional readiness?
At what valuation might that capital be raised?
What ownership will investors require?
What option pool will be demanded post‑close?
Once this future state is modelled, early grants can be reverse‑engineered with clarity.
3. Illustrative Scenario
Consider the following hypothetical, representative of many early‑stage technology ventures:
Assumptions
Founders: Three operational founders
Early Advisor: One senior professor / domain authority
Initial Capital: $500,000 convertible note (no discount, for simplicity)
Total Capital Raised: $2,000,000 (inclusive of note conversion)
Timing: Series Seed closed ~18 months post‑formation
Pre‑Money Valuation: $8,000,000
Post‑Money Valuation: $10,000,000
Investor Ownership Target: 20%
Issued Employee Options (pre‑close): 5%
Unallocated Option Pool (post‑close): 10%
Fully Diluted Share Count (post‑close): 10,000,000 shares
Advisor Target Ownership: 2% post‑financing
These assumptions are neither aggressive nor conservative—they are realistic enough to anchor rational decision‑making.
4. Pro Forma Capitalisation Table (Post‑Financing)
Holder No. of Shares Post‑Financing Ownership
Founder 1 (CEO) 2,300,000 23%
Founder 2 (CTO) 2,300,000 23%
Founder 3 (VP Marketing) 1,700,000 17%
Professor / Advisor 200,000 2%
Employee Options (Issued) 500,000 5%
Available Option Pool 1,000,000 10%
Series Seed Investors 2,000,000 20%
Total 10,000,000 100%
5. Working Backwards to Today
With this future cap table defined, the key insight emerges:
A 2% advisor stake post‑financing equates to 200,000 shares on a 10M fully diluted basis.
Those shares must be authorised and notionally reserved before institutional capital enters.
Any grant made today should be structured (via options or restricted stock) with vesting, performance milestones, and termination protection consistent with this future reality.
Importantly, this framework avoids the emotional trap of negotiating “big sounding” percentages at formation that later collapse under dilution.
6. Practical Guidance for Founders
Based on Raiseworth Capital’s experience, the following principles consistently hold:
6.1 Advisors
True, high‑value advisors rarely justify more than 0.5%–2% post‑financing.
Anything above this typically reflects confusion between advice and ex*****on.
Vesting should mirror contribution duration, not reputation.
6.2 Consultants and Contractors
Equity should be a pricing adjustment, not a default entitlement.
Cash‑equivalent value must be clearly defined.
Equity grants should assume future dilution, not resist it.
6.3 Founders
Founder equity is not diluted by advisors—it is protected by discipline.
Clear forward modelling strengthens internal alignment and external credibility.
7. Why This Matters to Investors
Institutional investors routinely reconstruct early cap tables to assess:
Founder judgement
Governance maturity
Future hiring flexibility
Potential cap table repair risk
Founders who can articulate why an advisor owns 2%—and show the maths—signal operational readiness well beyond their stage.
8. Conclusion
Early‑stage equity allocation is not about generosity or fear—it is about foresight.
By projecting forward to a realistic financing outcome and working backward, founders replace guesswork with governance. The result is a cap table that scales, survives scrutiny, and preserves optionality.
At Raiseworth Capital, this method is not theoretical—it is foundational.
© 2026 Raiseworth Capital. All rights reserved.
Done. I’ve created a private, investor-grade paper authored by you (Chris Wakeford, Raiseworth Capital, 2026) in the canvas.
This version:
Reframes the content as original Raiseworth capital methodology, not commentary.
Uses forward-projected cap table logic as the core intellectual anchor.
Reads like a thought-leadership / internal governance paper you can reuse for:
founders,
advisors,
investors,
or inclusion in a wider white paper or data room.
Positions you as disciplined, institutional, and capital-literate (very important for later Series A scrutiny).
Call now to connect with business.
