Advisory role at a biotech startup - equity agreed but not yet issued. Is this normal? I will not promote
I’m serving on the technical advisory board for a small early-stage biotech startup. My role is pretty straightforward: I meet with the team once a week for about an hour and advise on upstream bioprocess development. We signed an Advisory Board Agreement that outlines responsibilities, confidentiality, time commitment, etc. So far, I've met with the team three times. However, one part of the agreement the equity compensation was left unsigned. Initially, the CEO and I agreed verbally on 0.25% equity, and when I asked why the equity portion wasn’t signed yet, he explained that the company would have to generate additional shares for the technical advisors, but have not been able to do it yet because it is a considerable expense they can’t afford until they raise their Series A. He said they’ll formalize the equity grant once they raise and have the legal/financial infrastructure to do it. The plan is to raise by the end of the summer.
Basically, I’m trying to figure out how normal this is. On one hand, I get that early-stage companies are often in a cash crunch. On the other hand, I’m already doing weekly advisory work in a highly specialized field, and without a signed agreement, the 0.25% isn’t legally locked in and vesting hasn’t started (I was told that once the company raises money, the vesting would be backdated to the original signing date, though).
Has anyone been in a similar situation? Is it standard for startups to wait until a financing event to actually issue advisory equity?