My company is bringing on a very key advisor and I wanted to know if anyone has a formula or a personal anecdote on how to decide the level of equity to grant this person.
0.1 to 0.25% is normal. I'm an advisor to several startups and have equity in this range in the form of options. I advise a few startups without having an equity stake and don't mind that I don't have a stake. I find that most startups that do offer equity are doing it to make it official and so they can tell the investors they're courting rather than because they want to motivate their advisor. Often advisors are brought on board for the social proof rather than out of any strategic need.