They want to know that there is a responsible human being (theoretically) at the premises who would be able to accept service of process or other official notifications.
A PO Box is just a box; U.S. Postal Service workers have no particular obligation to accept these notices on your behalf.
Because they do not want to disclose their home addresses, the owners of startup companies sometimes use corporate identity programs at places such as Regus or HQ Global Workplaces, or services such as "Mail Boxes Etc." or "UPS Store," since they offer street addresses and not a PO Box.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.