Founders often ask whether a board is necessary when preparing for a sale. In most privately held companies, especially those that are individually owned, family owned, or run by a small group of partners, a formal board of directors is neither required nor common. These businesses may have informal advisors, but structured governance is usually limited.
Still, the presence or absence of a board can influence how a company is perceived during a transaction.
Boards Are Not One-Size-Fits-All
A board of directors is not a legal requirement for most private businesses. It becomes relevant mainly when the ownership is distributed, and the board helps align interests of the shareholders. When selling to a private equity firm, a PE firm typically installs a board after closing to create oversight and enforce controls. Strategic buyers, on the other hand, usually integrate the company into their existing organization and do not maintain a separate board.
Even so, forming an advisory board in advance of a sale can create meaningful advantages. It helps a founder professionalize the business, strengthen discipline around financial and strategic decisions, and prepare for buyer scrutiny.
How Advisory Boards Add Value
An advisory board differs from a fiduciary board because it has no legal authority or voting power. Its role is to provide perspective, identify blind spots, and prepare leadership for the questions a buyer will ask.
Buyers look for signs of stability and continuity. A small group of credible advisors can signal that the company operates with discipline and foresight. Advisory boards can:
- Test strategic and operational assumptions before a buyer does
- Improve accountability by establishing a consistent review process
- Refine how the company presents its growth story and market position
- Demonstrate that leadership and oversight extend beyond the founder
This structure often leads to fewer surprises during due diligence and a smoother transaction process.
Who Belongs on Your Board
The effectiveness of an advisory board depends on the quality of its members. For companies preparing for a sale, the best advisors are those who bring relevant experience and independent judgment. Useful profiles include:
- Former executives who have led or sold businesses
- Investors with M&A or private equity experience
- Industry peers who understand sector-specific trends
- Services providers with deep expertise in key transactional areas (finance, legal, etc)
Motivations are important in selecting advisors. You want a board that will support the business, not push an agenda. Advisors should provide candid feedback, respect the founder’s authority, and focus on building long-term value rather than short-term optics. It is common for the company to cover advisors’ expenses, and as the company scales, even compensate them for their service.
When to Form Your Board
An advisory board can add value at almost any stage of growth. The right time to form one is when the business is mature enough to benefit from external perspectives and the leadership is ready for greater accountability. Many founders start by meeting with two or three trusted advisors who can challenge assumptions, review performance, and help focus priorities.
A board becomes especially useful when the company is scaling, expanding into new markets, or preparing for a leadership transition. The earlier it is established, the more time it has to shape strategy, reinforce discipline, and support long-term decision making.
In short, the best moment to create an advisory board is not when a sale or event is imminent, but when you are ready to strengthen governance and invite constructive oversight.
The Takeaway
A board is not required to sell your business, and most private companies operate successfully without one. However, a thoughtfully selected and experienced advisory board can be a valuable tool for professionalizing operations, improving governance, and building buyer confidence.
Roadmap Advisors helps owners prepare for sale by strengthening structure, refining strategy, and anticipating buyer expectations. If a transaction may be on your horizon, we can help you determine whether forming an advisory board is the right step and how to use it effectively to support your goals.
In the end, preparing for a sale is about positioning the business to inspire confidence. An advisory board formed early and used thoughtfully is one of the most effective ways to do exactly that. It helps you sell better, and it can give a founder greater peace of mind during a once-in-a-lifetime decision.
Next Steps for Founders
At Roadmap Advisors, we partner with business owners who want to be prepared for what’s ahead, not be reactive.
Our team brings deep experience in sell-side transactions, valuations, and due diligence, giving us insight into what buyers look for and how founders can best position themselves. If a sale is on your horizon in the next few years, we would be glad to schedule a consultation and explore how we can help.
Together, we can discuss how building the right board, refining your strategy, and anticipating buyer expectations can help you approach the process with confidence and achieve the outcome you’re working toward.