I found most of the answers above unsatisfying. Mainly b/c they don't rigorously take into account value and involvement. For any entrepreneur that is looking for real value and involvement from their advisors, the numbers above just don't cut it. Let's say an involved advisor spends 5 hours per week, and has a full time schedule with 8 companies that he works with. By the numbers above, this advisor would get between .2 and 1% in aggregate per year working full time, and all this with ZERO cash. Would you give an employee who works for you for free full-time only .2 to 1%?? Unlikely, if your company is early stage... you just wouldn't be able to get away with it. So, how do you expect to pay a much more valuable advisor at that rate?

If your advisor is truly valuable, then you're gonna have to step up what you provide in equity in order to get real involvement, otherwise you'll be left with a potentially valuable advisor who gives you no time, or a useless advisor who gives you time you don't want or need. Any advisor that is valuable and involved will know his worth and will essentially shoot down the numbers stated above because the numbers simply don't make sense.

First figure out what value this person would bring as a full-time, then multiply that figure by the fraction of full-time you expect him/her to be involved. Now full-time is typically a salary and equity situation, and if the advisory is all equity, then the salary component should be moved over to the equivalent amount of stock based on a reasonable valuation of the company.

If you work an advisory situation in this way, you'll do a much better job extracting value out of an advisor or advisory board. For entrepreneurs that try to get advisors on the cheap, I would suggest you'll continue to be mostly disappointed and cynical with the value you get out of your advisor relationships.