Advisory shares, also known as advisor shares, are a type of equity compensation that startups can give to advisors in exchange for their time, expertise, strategic insights, experience, and network. They are equity stakes issued to advisors in lieu of or in addition to cash. Advisory shares are usually subject to vesting for the duration of the working relationship, which encourages advisors to stay with the company for longer.

Advisory shares are often used as a way to compensate advisors, consultants, and other experts who provide valuable insights and guidance to a startup, typically in the early stages of growth. They can attract experienced advisors who may value equity more than cash, as it allows them to have ownership and "skin in the game". However, issuing equity, even to advisors, comes with risks such as dilution, overcompensation, and conflicts of interest.

There are two main types of equity compensation offered to advisors: restricted stock awards (RSAs) and stock options. RSAs are shares bought upfront, and options are the right to buy shares, which are usually delivered later on. Restricted stock units (RSUs) are another type of advisory share that can be used as incentives for advisors to invest in a companys long-term success.

Advisory shares do not come with voting rights or a stake in the companys profits. Instead, they grant the holder the right to provide advice and guidance to the companys management team. Advisory shares are often used by startup businesses and can be issued to businesspeople with previous experience as company founders or senior executives.

In summary, advisory shares are a type of equity compensation given to company advisors in exchange for their time, expertise, strategic insights, experience, and network. They are equity stakes issued to advisors in lieu of or in addition to cash and are usually subject to vesting for the duration of the working relationship. Advisory shares do not come with voting rights or a stake in the companys profits, but they grant the holder the right to provide advice and guidance to the companys management team.