For startups and growing companies, an advisory board can be a game-changer. Unlike a formal board of directors, which holds legal responsibilities, an advisory board provides strategic guidance, industry expertise, and networking opportunities without the regulatory burden. Yet, despite their potential, many companies struggle to create advisory boards that deliver tangible value. Establishing and running an effective advisory board requires careful planning, clear objectives, and deliberate engagement.
Understanding the Purpose of an Advisory Board
An advisory board’s primary role is to provide insight and counsel rather than governance. Its members often bring specialized knowledge, industry connections, or operational experience that a company may lack internally. For startups, advisory boards are particularly valuable in guiding early strategic decisions, supporting fundraising efforts, and validating product-market fit.
Take the case of Slack, which relied on advisors in its early stages to refine its enterprise messaging platform and gain introductions to key clients. These advisors were instrumental in shaping the company’s approach to security, scalability, and enterprise adoption, long before formal venture capital support was fully in place.
Step 1: Define Clear Objectives and Expectations
The foundation of a successful advisory board lies in clarity. Companies must define why the board exists and what it is expected to achieve. Are members there to guide market entry, support fundraising, mentor the executive team, or provide technical expertise? Establishing measurable goals ensures both the company and its advisors understand their roles and responsibilities.
Case in point: Airbnb engaged advisors in its early international expansion to provide market-specific insight. Each advisor was given specific objectives, such as evaluating local regulatory challenges, understanding cultural nuances, and identifying potential partner networks. This clarity allowed the advisory board to contribute meaningfully without overstepping operational boundaries.
Step 2: Identify and Recruit the Right Advisors
Selecting advisors is arguably the most critical step. Successful advisory boards balance expertise, influence, and chemistry. Advisors should complement the internal team, not duplicate it, and ideally possess networks or experience that can accelerate growth.
Companies often look for a mix of industry veterans, functional experts, and investors who can lend credibility and open doors. Compensation can vary from equity stakes to stipends or a purely voluntary arrangement depending on the company’s stage and resources.
Example: Stripe, the payments platform, engaged seasoned fintech executives as advisors during its early global expansion. These advisors offered guidance on compliance, regulatory strategy, and cross-border payments, which helped Stripe navigate complex European and Asian markets.
Step 3: Structure Your Advisory Board Effectively
Effective advisory boards are structured with regularity and purpose. While meeting frequency varies, quarterly meetings are common, supplemented by ad-hoc consultations. Companies should provide agendas, updates, and specific questions to ensure meetings are productive.
Documenting outcomes and recommendations is equally important. Not only does this help the leadership team act on advice efficiently, but it also demonstrates respect for advisors’ time and expertise.
Step 4: Foster Engagement and Open Communication
Advisory boards are only effective if advisors are actively engaged. Founders should maintain transparent communication, provide access to relevant data, and ask for specific guidance rather than generic advice.
Case study: Dropbox leveraged its advisory board by sharing monthly growth metrics and product roadmaps. Advisors were encouraged to provide targeted feedback on monetization strategies, enterprise adoption, and user experience. This engagement helped Dropbox refine its freemium model and expand its enterprise offerings more successfully.
Step 5: Review and Evolve the Advisory Board Over Time
Advisory boards are not static. As a company grows, its needs evolve, and the composition of the board should reflect changing priorities. Periodic reviews can assess each advisor’s contribution, revisit objectives, and refresh membership to align with new strategic directions.
Early-stage companies may focus on fundraising and product development, while later-stage companies might prioritize international expansion, regulatory compliance, or leadership development. Flexibility ensures that the advisory board remains a strategic asset rather than a ceremonial body.
Lessons from Successful Advisory Boards
A common thread among companies that leverage advisory boards effectively is intentionality. Advisory boards function best when they are treated as a strategic tool rather than a prestige checkbox. This involves:
- Clear role definition
- Targeted recruitment based on skill gaps
- Structured engagement with actionable follow-up
- Ongoing evaluation and adaptation
Companies like LinkedIn also demonstrate the long-term impact of advisory boards. Early advisors provided guidance on scaling the platform, managing investor relations, and navigating enterprise client relationships. Over time, LinkedIn evolved its advisory board to address international growth and regulatory challenges, proving that dynamic engagement maximizes impact.
Advisory Boards as Strategic Accelerators
Setting up and running a successful advisory board is a deliberate, strategic process. For startups and growth-stage companies, an advisory board can provide expertise, credibility, and connections that are otherwise difficult to obtain. By defining clear objectives, recruiting the right advisors, structuring engagement effectively, and reviewing performance over time, companies can turn advisory boards into powerful growth levers.
When managed thoughtfully, advisory boards transform from a symbolic gesture into a practical engine for strategic decision-making, market entry, and long-term success.