Most organizations are looking for a competitive advantage, a way to stay ahead of the curve and gain the insight and wisdom to create growth and success. So how do some educational institutions, Fortune 1000 companies and innovative technology companies achieve these results? They mimic a true and tested strategy used by many venture capital firms, which includes hiring an Entrepreneur in Residence, or EIR. This adoption is a nod toward the acceptance of an opportunity originally presented by the startup ecosystem.
Typically, in the Venture Capital (VC) world, an EIR takes on an advisory role within an organization, based on expertise, experience and relationships. They are often asked to play a role that may be missing in a portfolio company. There has been a growing trend to bring an EIR into traditional organizations to pursue building relationships in the early stage community, introducing the organization to new business models, and creating potential strategic partnerships. Additionally, some established organizations have used the EIR role as a way to incubate millennial entrepreneurs with passions similar to the mission of the company, and to provide them the space and resources to develop their ideas. Regardless of the role of the EIR, it is important that the organization is open to change, taking risks and understands the importance of being willing to listen to the insight and feedback provided.
The traditional role of an EIR is to assist with various due diligence and operational matters based on experience and subject matter expertise. The individual uses their role of EIR as a chance to identify an opportunity that the organization can support, offering guidance and leadership where needed. The benefit to the organization is the EIR can provide assistance to multiple groups, divisions and teams at the same time.
More recently, this role is being used to create significant value to an organization, cultivating innovation by bringing in an outside perspective. Especially for organizations with entrepreneurs as the target market, or those that are looking to attract entrepreneurially minded team members. The Entrepreneur In Residence lends his or her credibility to the organization and he or she is able to help the team maneuver through obstacles and challenges, as well as make important introductions based on a lifetime of relationship building and networking.
Many EIR come from an entrepreneurial background outside of the traditional corporate America lineage. These individuals beat to their own drum and have done things a little differently, yet display leadership, expertise, wisdom and knowledge in areas traditionally found in startups and growth-oriented small businesses. They will typically have a certain amount of experience wearing multiple hats, are not afraid of failure, have uncertainty in their DNA and understand the importance of being resourceful.
The compensation around the EIR role depends on the organization and the candidate. The compensation can range from office and use of the team and support staff, to a stipend. For organizations looking to bring the person aboard to their team, they will want to set it up for a limited time that can be extended, and budget $60,000 to $150,000 depending on the candidate.
The role of EIR can have a tremendous impact on a growth-oriented organization seeking transformation and growth. Ultimately, it is up to the leadership to determine if this role is a fit for the vision of the organization and to create a job description in line with the desired outcomes. Remember, at the heart of this position is the mindset of an entrepreneur, a concept that is crucial to forward-thinking organizations looking to make an impact.