K7J ADVISORY SHARE & SAFE NOTE
What are advisory shares? They are a unique type of equity compensation often granted to partners rather than employees. ‘Advisory shares’ is not a legal category of stock but a common startup term for equity compensation to partnership. Advisory shares are equity compensation given to individuals who provide promotion, connections, or exposure to a company they partner with. Partners are usually granted a small commission percentage of sales commission, often between 10% and 25%, depending on their involvement, promotion, and their overall sales of their partnership products.
What is S.A.F.E. Note?
A key aspect of a SAFE is that it does not create or reflect any debt between the partners. In practice, a SAFE is an agreement that can be used between a company and an partnering investor. The investor invests performance in the company using a SAFE. In exchange for their performance (Time), the investor receives the right for future company equity subject to certain parameters set out in the SAFE agreement.
The "Simple Agreement for Future Equity" (SAFE) is intended to outline the terms under which an partnering investor can provide their time to a company as a distributing partner in exchange for commission and the right to future equity.