Young companies with high aspirations often start with informal mentors, then add specialized advisors, and develop a more formal advisory board over time.
Functionally an advisory board does everything that mentors and advisors can do. However, formalizing the relationship in a defined structure and instituting regular meetings and communications provides a level of mutual seriousness that can elevate the quality of interactions.
Advisory boards do not have the fiduciary responsibilities of a board of directors, so some people will prefer the advisory board role. From an entrepreneur’s perspective, the advisory board is providing advice but the company has no obligation to follow the advice. In some ways it can provide many of the benefits of a board of directors without the hassle.
If you plan on creating an advisory board, give it some thought, structure and planning. Think about how the board might operate over the next five years. With that perspective you can plan how people will be added to the board, and how they will leave (one year terms are great). You can think about how the board might need to change over time. You can make sure that people you want to still be working with you in five years have enough motivation to do so, but not so much work that it’s a burden.