An entrepreneur in residence (EIR) is traditionally a position at a venture capitalist firm.
The position is normally a short-term role, typically 6 - 12 months, during which an experienced entrepreneur (sometimes an experienced executive) is brought into a venture capital firm to develop a new business.
Increasingly, non-VC organizations have also been bringing in EIRs to advise them on business relationships, business models, and potential partnerships. Even university departments can hire EIRs to help grow a culture of entrepreneurialism.
What does an entrepreneur in residence do?
Normally, an entrepreneur in residence assists with due diligence and operational matters for existing companies within their VC firm’s portfolio. An EIR can supply support to multiple groups, divisions, or teams.
They may also develop their own new business (or explore emerging businesses that they might wish to join).
Because the EIR’s role is determined by the needs of the firm, their duties and responsibilities may look quite different based on the firm. Many entrepreneurs taking on an EIR role will be in between startups of their own.
What are the pros and cons of hiring an entrepreneur in residence?
Having an entrepreneur in residence offers several advantages for VC firms. These include:
Assistance with pitch reviews and due diligence, using the entrepreneur’s expertise and contacts.
Access to early-stage investment opportunities that might not otherwise be available to the VC firm.
On-hand consulting for the VC’s portfolio companies.
Early access to the entrepreneur’s new venture.
Using the entrepreneur (or their contacts) for leadership positions in existing portfolio companies.
The only real drawback to hiring an EIR is that it costs money to do so. However, given the short-term contract and the ability of the EIR to add value, hiring an entrepreneur in residence is seen as a low-risk, win/win strategy.
For the entrepreneur, being an entrepreneur in residence means broadening their network, getting insight into the VC (or other organization) that they’re working with, and gaining new experiences and perspectives.