Guide to Understanding an Entrepreneur in Residence
By Indeed Editorial Team
Updated December 4, 2022
Published May 14, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Entrepreneurs are essential in any economy for creating new ideas and satisfying consumers' needs using their initiatives. An entrepreneur in residence may temporarily provide investment advice and mentoring to a company in return for seed funding for their next project. Learning more about this role can help you create ideas that might help a company increase its market influence.
In this article, we explain the role of an entrepreneur in residence, discuss what they do, explain the benefits they provide, and answer some frequently asked questions.
What is an entrepreneur in residence?
An entrepreneur in residence (EiR) takes a temporary position with a company that wants their expertise. Depending on the industry, companies may consult them for various insights on investment advice, navigating potential challenges, and counselling for new startups. By providing the company with various services, the EiR may also receive certain benefits, such as access to the firm's resources or the opportunity to launch a startup.
Many EiRs looking to start their next venture are well-known industry executives, early employees of high-growth startups, or founders of successful companies. You may consider these paths if you also wish to become one. EiRs are typically employed by venture capital firms but can also receive opportunities from other companies, including:
private equity firms
What does an EiR do?
An EiR typically takes on various responsibilities that involve pitching meetings with other executives to discuss ideas and services. Other duties generally depend on the companies that employ them, such as the following:
Venture capital companies
The responsibilities of the EiR in a venture capital (VC) company typically involve assisting with its investment portfolio. They can advise on the company's existing investment portfolio and evaluate and recommend new and potential investments. They may also monitor these investments, hold meetings to discuss the position of the portfolio, and engage with portfolio company executives around their areas of expertise.
Law and tech companies
In a law firm, the EiR may assist the company's clients, offering advice to entrepreneurs to gain clients for the company by helping them with venture decisions and providing them with networks. They may also provide valuable and accessible products to startups to grow the law firm strategically.
For example, the EiR may advise the company to launch a startup program for early-stage technology-oriented companies based on a subscription model. The startup receives legal services in return for affordable monthly installments. Once the EiR starts their own company, they may also become a client of the law firm.
Business schools may employ EiRs to guide their students in starting their own enterprises. EiRs can help students and professors by sharing their experience and expertise. They can also help them develop new ideas and give insights into how these ideas can be transformed into sustainable business ventures.
Benefits of employing an EiR
An EiR can provide numerous benefits to organizations, including:
Managing portfolio business
EiRs can monitor subsidiary brands and equity deals to increase their market share and grow their audience, while the chief executive officer (CEO) focuses on other activities. They can also help founders avoid the parallel entrepreneur situation and help them start multiple companies concurrently. Parallel entrepreneurship describes an individual who closes a company while being in the startup process for another. The EiR can manage some of the CEO's responsibilities in one of the companies while the CEO focuses on the other.
Increasing industry influence
If an entrepreneur helps a venture capital company sell a successful startup, this may prompt them to explore further projects with other companies. If the EiR finds a new company, it may then compete with the original VC firm. Companies generally try to prevent this competition by retaining the entrepreneur's employment.
While the role of an EiR is usually temporary, the leadership may create a permanent position to entice the entrepreneur to stay with the company. If there's no permanent position available, the company may retain the EiR until a position becomes available. By hiring EiRs, companies can retain talent and raise their market share, which can increase their industry influence.
Growing the company's network
EiRs can also contribute significantly to the growth of a company's network. While they mostly obtain access to the network of investors and clients, they may also know investors and other startups that may be valuable to the company due to their experience as startup founders. The EiR can connect these individuals and companies to launch new startups and create long-lasting relationships that grow their network.
Companies also benefit from having committed entrepreneurs develop unique ideas and initiatives. EiRs can encourage team members to complete projects. They allow the company to capitalize on its employees' strengths and expertise to determine challenges with minimal supervision. When employers understand their employees' issues, they can create solutions that help increase talent retention.
Benefits of being an entrepreneur in residence
In performing their daily activities, the EiR may also benefit in the following ways:
Exposure to an array of companies
One primary benefit of being an EiR is exposure to companies from various industries. Being exposed to multiple companies may help the EiR eventually launch their own company. The role can offer the EiR potential partners or other VC firms to support the company or provide clients for its products and services. The EiR may also become a client of their former VC company.
Insights into activities of venture capital companies
Their role allows EiRs to fully understand how VC companies decide which startups to fund or which businesses to invest in for high returns. That may prepare them to launch their own startup. They can perfect how to pitch meetings to potential investors and venture capitalists and learn how to predict the responses once they complete their pitches.
Experience in a leadership role
While many entrepreneurs may want to create a startup, some may want to work with an existing company. By working in companies, an EiR can prepare for leadership roles in other positions by developing skills like communication, strategic thinking, and management. This strategy allows the entrepreneur to learn about new companies, which can also benefit the companies, as they have a trustworthy individual leading one of their startups.
Establishment of own startup
An EiR in a company usually works in temporary positions, and the company typically expects the individual to continue to work on its future projects. The entrepreneur may pitch their ideas to the company for approval. If the company likes the idea, it may agree to fund them, which means the entrepreneur can take this support forward and leave the temporary position.
FAQs about an entrepreneur in residence
Here are some answers to questions you may have about this entrepreneur role:
Do companies pay EiRs?
Whether the EiR receives payment typically depends on their agreement with the company that employs them. When EiRs receive payment, they generally take a nominal salary. According to Glassdoor, their average base salary is $40,891 per year. They may also access the company's resources and network and have office space and a receptionist.
What does an EiR at a university do?
EiR posts in universities may vary and require specialized backgrounds in different departments. For example, an EiR in medical school may be an entrepreneur with a background in medical technology. Their responsibilities in universities can include:
mentoring and advising student startups, especially those in the early stages of development
assisting students in developing their proposed business ideas, identifying markets, and possibly obtaining funding
working with alumni, staff, and faculty to help them commercialize university technology and intellectual property
teaching entrepreneurship courses and interacting with students during office hours
How long does an EiR position last?
The duration of the position typically depends on the individual and the company. Well-structured EiR positions are generally between six months and one year. EiR positions may also be permanent when the company creates a position for the EiR and retains them on a full-time basis.
Salary figures reflect data listed on the quoted websites at time of writing. Salaries may vary depending on the hiring organization and a candidate’s experience, academic background, and location.
Please note that none of the companies, institutions, or organizations mentioned in this article are affiliated with Indeed.
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