Our founding blog post talks about the BrightLoop mission. In short, we’re designing BrightLoop so VC-backed founders and startups can build relationships with top executives and so executives can participate in the success of the startups they help. Here’s how that works:

The warrant structure is simpler and more flexible for the startups we serve and has less administrative overhead. Our previous program used Advisor Vehicles, a special type of SPV investment vehicle. It required a separate SPV per startup per year and - because each SPV was a legal investing entity - required executives to create accounts on partner SPV sites like Sydecar and AngelList, required execs to make nominal investments in these SPVs, and was difficult for executives outside the U.S.

The current warrant structure allows a startup to grant BrightLoop a warrant and have BrightLoop execute letter agreements with advisors that legally entitle them to a portion of the proceeds from the warrant. It also makes it easy for execs to substitute BrightLoop equity if they have a conflict. It’s simple and inexpensive, and accomplishes the same goal with a fraction of the cost and complexity to BrightLoop and the executives.

If you are curious about how the warrants work in general, see this post from Carta.

In short, if you’ve answered a survey (a feedback loop) or joined a meeting, you’re already participating.

Advisors participate by engaging in various activities with the company, including taking meetings to evaluate product features, discussing go-to-market strategy, or introducing other advisors. Everything is tracked on the dashboard, and advisors can also see other activities available to them to earn greater participation.

If the company you are advising has issued a warrant to BrightLoop, you’ll be earning a portion of proceeds from that warrant. If the company you are advising hasn't offered a warrant yet, you’ll be entitled to a portion of proceeds from a warrant for BrightLoop shares instead

No, your warrant participation letters are binding commitments from BrightLoop that entitle you to a portion of the proceeds from the warrant that corresponds to the number of shares (i.e., 500) you have earned. This means you will not receive K1s or need to report any transactions until a time where the startup exits and any proceeds from the warrant are distributed to BrightLoop and then the corresponding advisors.

Any executive or advisors in good standing. BrightLoop reserves the right to suspend or terminate the accounts of any bad actors on the platform, consistent with our Terms.

Advisors from all countries can participate, but restrictions of popular payment platforms may make it difficult to distribute proceeds to executives in a small set of countries defined by the U.S. government, such as Afghanistan, Belarus, Cuba, North Korea, Iran, Russian Federation, Sudan and South Sudan, Syria, Ukraine and Venezuela.

No, executives no longer need to make even nominal purchases.

A warrant has value if the the value of each share when the company goes public or is acquired is greater than the strike price set when the warrant was issued. For example, an early stage startup may have recently sold preferred stock that valued the preferred stock at $3 per share, and determined the fair market value of a common share to be $1. The startup then issues a warrant to BrightLoop for 10,000 common shares at a strike price of $1. If the company exits at $50 per share, the warrant is worth 10,000 x ($50 - $1) = $490,000, which is subsequently distributed to advisors. That’s a rosy case of course, not all startups will see that type of appreciation.

It depends on the stage of the company you are advising. In general, successful late-stage companies can exit, be acquired or IPO within a few years of their last venture round, while early stage startups can take as much as 8-10 years to exit. It’s best to plan on a long timeframe, and be happily surprised if a company exits sooner.

If a startup has issued a Warrant to BrightLoop and has a successful exit, and the value of each share on exit is greater than the strike price set when the warrant was issued at the time the startup exits, the warrant for all the shares is automatically exercised and the startup pays BrightLoop the difference. BrightLoop then distributes proceeds from the warrant to each executive that corresponds to the number of shares (i.e., 500) they have earned.

Yes. BrightLoop takes 5-15% of each warrant (depending on the subscription tier of the startup) and allocates the rest to advisors. There are no fees for advisors.

Conflicts are rare but come up in two main scenarios: when an executive works at a company that requires permission for the employee to start advising a startup, or when an existing advisor wants to trial or buy the product from the company they are advising. The warrant amounts are relatively small and executives never own equity in a startup they are advising, but it can still be considered a potential conflict if an executive is entitled to a portion of the proceeds from a warrant. In these cases, the best practice is to discuss and disclose the conflict. Alternatively, if an executive is concerned about a potential conflict, they can defer their participation until a future time when they are confident no conflict exists and still get credit for historical contributions, or they can swap and participate in a warrant for BrightLoop shares to avoid the conflict altogether.

Yes, if the startup you are advising opens a slice of its next round to advisors, you may also have the opportunity to invest alongside top tier VCs in that round.