Buying back advisor equity before a Series A means offering your early advisor a fair cash number for their shares, framed as a clean exit for both sides rather than a request for them to give something up. Most founders wait until a term sheet is on the table to have this conversation, which is exactly when they have the least leverage left.
If a 0.25% advisor grant from eighteen months ago is still sitting on your cap table and that advisor has gone quiet, a Series A investor will flag it during diligence. The fix is not a legal letter. It is a specific conversation, timed early, with a specific number attached before you walk in.
Why advisor equity becomes a cap table problem
Advisor equity turns into a diligence flag when the advisor stopped contributing but the grant kept vesting, or had already fully vested, on the original schedule regardless of activity.
Most early advisor grants run 0.1% to 1%, vesting over two years with no cliff, sometimes fully vested for a single warm intro. Once the advisor goes dark, that equity keeps counting against your option pool math and shows up on the table with no explanation attached. Investors read a cap table for founder discipline as much as ownership percentage. A stale, unexplained line item reads as something you didn't notice or didn't want to deal with.
The buyback script
The opening line that works: "I'm cleaning up the cap table ahead of raising a Series A, and I want to make this right for both of us instead of leaving it messy."
Run the conversation in this order:
- Lead with the round, not the awkwardness. Frame it as routine Series A prep, not a confrontation about their lack of involvement.
- Name the number first. Don't ask what they think is fair. Say the dollar figure you calculated before they anchor you somewhere worse.
- Give them two clean options. Cash buyback now at a set price, or they keep the shares and you disclose the grant status plainly to investors. Most advisors take the cash.
- Put a date on it. "I'd like to close this out by a set date, ahead of when we start sharing the cap table with investors." A deadline tied to the round moves people who'd otherwise let it sit.
What to do if they say no
If the advisor declines, check the actual grant agreement before you escalate. Some early agreements include repurchase rights on unvested shares if the advisor relationship ends. If yours does, your lawyer can execute the repurchase without a negotiation at all.
If there's no repurchase right and no clean legal lever, you have two remaining paths: offer slightly above fair market value once as a final number, or accept the position and disclose it plainly in your data room rather than letting a VC find it first. A small, clearly explained grant rarely kills a deal. An unexplained one invites more questions than it deserves.
How much to offer
Use your most recent 409A fair market value per share as the floor, then add a premium for speed. A typical buyback lands at 1.25x to 1.5x FMV.
Worked example: an advisor holds 25,000 shares (0.5% on a 5,000,000 fully diluted share count) and your last 409A set common FMV at $0.40 per share. A buyback at 1.25x to 1.5x FMV prices the shares at $0.50 to $0.60 each, putting total cash cost at $12,500 to $15,000.
Compare that to the cost of leaving it unresolved: a Series A diligence delay of even two weeks while lawyers chase down grant documentation and vesting confirmation costs you more in momentum and negotiating position than the buyback ever will.
What to do first this week
Pull every advisor grant agreement on your cap table and mark each one active or dark. Get your current 409A FMV per share if you don't already have a recent one on file. Start the buyback conversation with the most inactive grant first, not the largest one. The smallest, stalest line items are the ones that raise the most questions with the least context attached, and they're usually the cheapest to clear.
Frequently asked questions
Can you force an advisor to sell back their equity?
Only if the original grant agreement includes repurchase rights. Without that clause, it's a negotiation, not a compulsion, and the advisor is free to decline.
What's a fair price to buy back advisor equity?
Start from your most recent 409A fair market value per share, then add a 25% to 50% premium for speed and goodwill. Going meaningfully below FMV usually stalls the conversation.
Do investors actually care about small advisor grants on the cap table?
Yes, especially when the vesting status is unclear or the advisor is unreachable. It's less about the size of the grant and more about whether you can explain every line on the table without hesitating.
Should I use a lawyer for an advisor equity buyback?
Have a lawyer draft and execute the actual repurchase or transfer paperwork. The initial conversation and number don't need one, and doing it founder to founder tends to land better than a legal letter opening the discussion.
What if the advisor's equity already fully vested?
Fully vested shares can still be bought back, just not compelled the same way unvested shares might be under a repurchase clause. The cash buyback conversation works the same either way, it's simply a straightforward purchase instead of an early repurchase.
Clean up the smallest, oldest grants first. By the time you're building the data room, every line on your cap table should have an answer attached before anyone has to ask.