While most start-up companies don't have formal boards of directors until formal money comes in, it is not uncommon for a start-up to form a board of advisors. These are often unpaid professionals with domain expertise who volunteer to help a start-up get off the ground by offering advice, guidance, important introductions and other inputs that not only help the company get started, but also add credibility to the concept which is comforting for potential investors.

The involvement of these people can vary dramatically and they usually don't expect to be paid, but giving them pie is fair if they are providing real value. A Grunt Fund can accommodate these people quite nicely as long as their GHRR isn't unreasonable. Because advisors are often successful people, they can command high salaries and, therefore, high hourly rates. These rates can get out of control pretty quick for the average start-up.

One way to manage this is to develop an "advisory plan" that sets a fixed rate for an advisory board member's time and a minimum number of hours before a slice of the pie is cut for them.

For instance, you could tell them that, as a member of the advisory board, they are entitled to a $200 GHRR starting after ten dedicated hours. So, when they hit ten hours they would get a slice equal to $2,000 of the TBV and they would begin participating as a Grunt. Unlike a consultant Grunt, a buyout option probably doesn't make sense given that the money may not be significant and their ongoing relationship with the firm would be beneficial.