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What they are, who they are for, and how to use them. A sweat equity agreement is a powerful tool for individuals looking to. This document outlines an advisory agreement between an advisor and a startup company. The advisor will provide advisory services in exchange for equity options in the company. A sweat equity agreement is a legal document signed by the partners that protects their right to equity in the company. It is important to have such an agreement between partners at the. What are the key elements for a sweat equity agreement? A sweat equity agreement should cover the following basic things: What the consultant will provide on the path to services. Adding a partner via sweat equity can be incredibly useful for some businesses, but it isn’t necessarily a good fit for everyone. Read our article for the pros, cons, how to create. Sweat equity agreements are commonly used in startups to compensate for the lack of funds to hire employees. Startups rely heavily on the skills and efforts of their founders,. Here is an example of a sweat equity agreement for illustrative purposes only. Before using it, consult legal counsel.