The Advisory Board Illusion

I got a call last week from a founder in the pet space. Interesting product, early traction. He wanted me on his advisory board. He'd already drafted a standard advisory agreement - the template most founders use, 0.25% equity, light-touch involvement. My name and my pet-industry background would look good on his pitch deck.

I said no.

Not because the company wasn't interesting - it was. Not because I didn't want to help - I did. I said no because I've been on enough advisory boards to know what that agreement actually produces. A burst of energy at the start, a few good conversations, and then a slow fade where both sides feel a little guilty but nobody does anything about it. The founder gets a name on a slide. I get a tiny equity stake in a company I'm not close enough to actually help. We both pretend this is a meaningful relationship.

I'd rather just hop on a call with him once in a while and be genuinely useful. No agreement, no equity, no obligations. Just two people talking honestly about his business.

Designed to be ignored

The standard advisory board setup sounds reasonable until you've been there a few times. Founder recruits three to five experienced people. Everyone signs a lightweight agreement. The equity is small enough that nobody objects. The time commitment is vague enough that nobody feels trapped. And for a while, it works - or at least it looks like it works.

The advisors have their own obligations. The founder is busy building. The quarterly calls get rescheduled, then skipped. Promised introductions get forgotten. Nobody's at fault - the structure just doesn't require anyone to show up, so eventually nobody does.

I watched the same pattern from the investor side, running a CVC fund. One of our portfolio companies had a retired pharma executive on their advisory board. Someone who was supposed to open doors to strategic partnerships and share inside perspective on how the big players negotiate. The first few months were fine - an introduction or two, a few useful calls. Then the company hit a critical negotiation - exactly the situation the advisor had been brought on for. But he was busy, and he'd drifted far enough from the day-to-day that his suggestions were out of date. Nothing he did was wrong. It just wasn't what the company needed when it needed it.

Most advisory boards are optimized for low friction - easy to set up, easy to maintain, easy to ignore. And low friction is exactly what they deliver.

The cost nobody counts

Here's what founders miss about the advisory board model: the cost isn't the equity. At 0.25%, the dilution is negligible. The real cost is not having a support structure that actually supports.

A founder with three advisors on paper and zero advisors in practice is worse off than a founder with no advisors at all - because the first founder thinks the box is checked. The slide is in the deck. The names are on the website. Everything looks handled.

Meanwhile, the questions that matter - should we take this term sheet, is our financial model credible, are we talking to the right investors, is this partnership worth the distraction - those questions need someone who's close enough to the business to have a real opinion. Not a smart person giving you 30 minutes once a quarter. Someone who knows your numbers, understands your cap table, has context on the decisions you've already made and the ones coming next.

The informal alternative

Some of the most valuable advisory relationships I've seen - and been part of - have no formal structure at all.

A founder reaches out, we get on a call, I look at their deck or their financial model and tell them what I think. Maybe I make an introduction. Maybe I push back on an assumption they haven't questioned. No agreement, no equity, no quarterly call on the calendar. Just one person helping another because the conversation is interesting and the problem is worth thinking about.

I have five or six of these going at any time. Founders who call when they have a decision to think through, send me a deck, ask me to look at a financial model. No agreement, no equity. The founder isn't "managing" me as an advisor. I'm not wondering whether my 0.25% will ever be worth anything. We're just talking, and if I can help, I help.

These conversations keep me sharp. The problems are real, and I'm usually learning something about a space I wouldn't otherwise be close to. Some of them have turned into board seats over time. Most haven't. I don't treat them as a pipeline - they have their own value.

One thing I ask: keep me in the loop. Not formally, just tell me what happened. Which term sheet did you sign? Did the hire work out? Partly it's satisfying to know whether something I said actually mattered. Mostly it's practical - the next conversation is more useful when I know what came of the last one.

Founders sometimes assume every ask has to be transactional - if they take someone's time, they owe equity or a title. They don't. Most experienced people will take a call about a specific problem and think it through seriously. The ask that works: a real question, one topic, easy to say yes to.

This doesn't scale. You can't put "I have occasional calls with smart people" on a pitch deck slide. But it often produces more value than the formalized version, because it's driven by genuine interest, not contractual obligation.

When informal isn't enough

Informal covers a lot of ground, but it has a different kind of limit. Sometimes you need someone actually in the work with you, not just available for the occasional call. When you reach that point, there are two distinct things founders sometimes confuse.

The first is a deep, structured engagement. Someone in the trenches with you - building the financial model, shaping the investor story, reviewing the partnership deal, thinking through the next hire before you make it. This is real work that takes real time. It needs to be structured honestly: a monthly retainer, clear expectations, real commitment on both sides. Call it consulting, call it fractional, call it a serious advisory engagement. Just don't try to get it on a standard template with 0.25% equity and a quarterly check-in.

Worth noting how these relationships usually start. Almost never with a formal proposal. Usually with a few informal calls where both sides figure out whether the chemistry works, whether the advisor understands the business, and whether there's something worth building. This is how you find out whether a deeper engagement makes sense. If it does, you pay for it like any other serious professional service.

The second is governance - a different thing entirely. A deep advisory engagement buys you help; governance buys you accountability. Not someone helping you execute, but someone with the authority and obligation to push back on major decisions. Fundraising strategy, pivots, C-suite hires, a difficult investor relationship. That's where board seats matter. I've written separately on what building a board actually looks like. A well-composed board of directors has fiduciary duties, voting rights, and real skin in the game. An advisory board has none of these. When a board member disagrees with a decision, that disagreement carries legal weight. When an advisor disagrees, the founder can ignore the email.

Board seats come with personal liability and should be reserved for people genuinely embedded in the business. But that's the point - the accountability is mutual and structural.

The question worth asking

So when a founder asks me about building an advisory board, I usually ask a different question back.

What do you actually need?

If the answer is occasional perspective, you don't need a board. You need two or three people who'll take your call when it matters, and a habit of calling them.

Deep strategic help is different. That's real work, and it deserves a real arrangement - a retainer, clear expectations, and enough informal time up front to know whether it actually works. Not a template with a quarterly calendar invite.

Governance is a third thing entirely. That means a board of directors, with the right people and real authority.

As for the pet-tech founder - we've had a long call since, and we walked through a few of the dilemmas he's wrestling with. I'm going to go through his financial plan this week, and we'll talk again after that. No agreement, no equity, no pretense. If this turns into something more structured down the road, we'll both know when, and we'll find the right setup together. For now, I'm happy to help, and I think he's getting more out of this than he would have from a signed template and a quarterly calendar invite.

I help founders navigate strategy and funding decisions when the path isn't clear. If you're there, let's talk.