Rethinking advisory shares: A mentor's sharp counterpoint

A disciplined approach: mandatory trials, board alignment checks, and performance-based options.

Author

Michael Morgenstern
April 29, 2025

Happy Tuesday Brex community,

A wise counterpoint to an argument I've previously made on advisory shares landed with me this week from a mentor and leading global operator, offering a potent framework. Their advisory mandate starts sharply: institute a mandatory 60-90 day informal trial for every potential advisor before any formal commitment. The critical test extends beyond founder rapport to the often-missed deep alignment with investors and board dynamics – ignoring this, they warned, actively engineers dysfunction. This filter isn't ceremonial; they report only ~25% of their own trials ultimately convert, proving its essential power in validating true strategic fit. I felt it was important to share this counterpoint because, at Brex, we're obsessed with learning, growing, and debating

If that rigorous trial succeeds, the agreement's structure demands equal precision. Forget vague mandates; insist on hyper-specific, outcome-focused objectives, potentially time-boxed. Critically, they flagged granting flat cap table percentages as a fundamental error. The only sound approach uses options grants vesting over time, directly contingent upon achieving concrete, pre-defined company milestones. This ensures advisory equity isn't merely given, but earned through tangible, measurable impact.

Growing together, Michael Morgenstern

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Tyson Tuttle is the CEO of Circuit

Circuit knowledge network for enterprises to transform static information into living content. Circuits (with their semiconductor roots) are an entirely new way to share AI-enabled information. At 25 people, the company is targeting the "slow adopter economy" - sectors like manufacturing, distribution, and supply chains that are usually the last to adopt cutting-edge software tools. Initial customers include companies like Culligan water. Circuit has an extremely ambitious vision. Circuits (with their semiconductor roots) are an entirely new way to share AI-enabled information.

Ambassador’s Perspective: Circuit just raised one of the largest seed investments in Austin's history with $15M to bring legendary CEO Tyson Tuttle's vision to life. Tyson previously led a $1B revenue public semiconductor company and sits on the board of the Dallas Federal Reserve and the new Texas Stock Exchange. At 25 people, the company is targeting the "slow adopter economy" - sectors like manufacturing, distribution, and supply chains that are usually the last to adopt cutting-edge software tools. Circuit has an extremely ambitious vision. They are hiring, fundraising, and hunting for more customers. We are excited about their growth!

 

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