Have you ever wondered what Entrepreneur in Residence or EIR means? And how is this position any different from others? Even though the position is growing in its popularity, it is difficult to find out what exactly it entails.
In this article, we help you discover what an entrepreneur-in-residence is and what its responsibilities are. For more insights from experienced entrepreneurs, sign up for our EWOR Platform and gain access to over 17 courses and a plethora of resources.
The Definition of Entrepreneur in Residence
Entrepreneur in residence (EIR), also called executive in residence, is a short-term position at venture capital firms (VC). They provide their expertise to a company for a limited amount of time. It usually lasts six to twelve months, but may vary depending on the contract and the company. In return, the entrepreneur in residence can gain new experiences and move on to the next project. EIRs can also present ideas for future projects and get support from the company, which may even include funding.
Entrepreneur in residence usually works in venture capital firms. However, they can also work for different non-profit organisations, law firms, universities, private equity firms or large corporations. Nowadays, the position of the entrepreneur in residence is gaining popularity and more companies and institutions wish to hire one.
Different Types of EIRs
The most common type of entrepreneur in residence is a position in a firm or company. But there are also country-sponsored EIRs that are sponsored by the government and community EIRs. EIR in the community wants to make an impact on the environment by, for example, creating a non-governmental organisation.
EIRs in organisations can also be divided into two types. The first is as an internal entrepreneur in residence. This is a person within the company who works to reach the company’s goals.
The second type, or external entrepreneur in residence, is a person from outside the company’s staff. Most often, it is a successful entrepreneur hired to bring certain results in a short period of time. This person gives an honest opinion about the operational processes and helps improve them. As this person is an outsider, they give their criticism and real feedback without any fears of losing the position.
What Are the Job Responsibilities of EIR?
An entrepreneur in residence’s duties are usually decided by the company’s needs. They can create a new company, assist in due diligence, provide expert advice and optimise the operational processes. An entrepreneur in residence can also come up with various ideas to improve certain areas. They help fix the existing problems the hiring company might experience.
Here are the common tasks entrepreneurs in residence deal with:
- Pitch meetings
- Offer training, mentorship and expertise
- Optimise operational processes
- Engage with portfolio companies
- Conduct research to make improvements
- Assistance in due diligence
- Create and manage new firms
- Conduct meetings with co-founders, recruiters and executives
- Produce new ideas
- Boost profit
Should You Hire an Entrepreneur in Residence?
An entrepreneur in residence can bring numerous benefits to a company. Being a skilful expert in the field, they can help your company grow and offer invaluable advice. They assist during meetings, consult and share their knowledge. Moreover, they bring in new ideas that can help expand your firm even more by fostering innovation.
EIRs also reduce the amount of work for others and, overall, reduce pressure on the workplace. They find opportunities to increase profit by finding gaps in products or finding new target audiences. Hiring an entrepreneur in residence generally pays off and can get your company to the next level.
What Are the Benefits for the EIRs?
The position of the entrepreneur in residence is great not only for the company but for the people who hold these positions. Flexibility is one of the many advantages of this job. As it is a short-term position, a person can gain valuable experience and then move on to the next project. While working for a certain company, EIRs can explore ideas for their new project or start-up and build a network. This network will be important for future endeavours.
One of the key benefits for EIRs is the salary.
According to The New York Times, an entrepreneur in residence may earn $90,000 in six months. Sometimes this number goes even higher and sometimes can reach up to $300,000. In Germany, Glassdoor claims, an EIR can earn from €39,000 to €108,000 per year, with an average of €68,708. The amount of money the person earns depends on how much prior experience EIR has, negotiation skills and the requirements of the company.
The position of an entrepreneur in residence has benefits for venture capital firms, a community, or large organisations. EIRs play essential roles in the company while also sharing their experience collected for years. It is important to listen to their advice as this is the main reason they are recruited. Hiring an entrepreneur in residence is a win-win situation for both the company and the person, as both can gain many benefits from it.