What is an EiR?
An Entrepreneur in Residence or Executive in Residence is position or title of a person hired by a University, Incubator, Hub, Venture Capitalist or Small Business Centre (we’ll call it a Host from here on) to provide help and assistance to their companies on a part-time but regular basis. There are three primary areas that EiRs operate:
- Launching entrepreneurial ventures;
- Assisting in the evaluation of potential investments of time and/or money; and
- Providing expertise and domain knowledge to an existing investment.
While an EiR is experiences in many facets of business, they are not an expert in all businesses. Rather the EiR is an easy to access, confidential sounding board for business owners until the businesses are large enough to have their own Board of Directors. The EiR’s role is to provide un-conflicted, counter-arguments and help entrepreneurs think clearly and methodically about the issues they are trying to resolve to make their business successful with the minimum pain. EiRs will help the Executive Team meet the right people – advisors, mentors, investors and board members – at the right time as the company grows.
To illustrate the role more clearly, this table shows the differences between advisors, mentors and EiRs:
|Availability||When suitable to advisor.||When suitable to mentor.||Regular, predefined times.|
|Cost||Zero to company but expectations of future work.||Zero to company but (sometimes) expectations of preferable investment terms.||Zero to company since costs paid for by Host.|
|Conflict||Aligned to advisor’s business.||Depends on mentor and may not be disclosed.||Aligned to Host and therefore company.|
|Contacts & Network||Excellent in area of advice.||Mentor dependant.||Comprehensive range of contacts.|
|Experience||Domain experience.||Mentor dependant.||Founded & run own business. Qualified coach.|
|Matching||Professional.||Aligning interests and availability can be difficult.||Professional.|
What is the background of a successful EiR?
The EiR has a range of experience and will, as a minimum, have started their own business, been through a company sale process, presented training courses, and be qualified as a coach. They will be keen to impart their knowledge and wisdom to individual or teams who want an outside, impartial review of their business or part of a business. EiRs are well connected in the business community allowing them to refer business owners to experts as the need arises.
How does it work?
Depending on the Host, an EiR is hired for a number of days per month where they attend the Host premises. The business owners and entrepreneurs will book specific times during those days for one-to-one discussions of any subject that are currently of concern. The EiR will provide specific comment and information to the business owner specific to their business rather than a generic overview that they may get on a course or workshop. Typical conversations may be around:
- Seeking customers – specific ways this business can find new customers, relevant success metrics, managing the sales process and after sales care.
- Seeking capital – the different methods, their implications and chances of success. Contacts with appropriate funders.
- Employees – What to do when looking for new employees and how to manage them. For example helping to manage someone’s departure when they don’t wish to leave.
- Negotiation – How to negotiate with a specific customer. What are the bargaining chips? How may the process be run to get the maximum benefit for the company? For example the EiR may role play being the customer.
- Agreements – Overview of agreements and their long-term implications for the company. Why are some clauses important? Recommend lawyers to speak to. For example the EiR can help educate the business owner in the “lawyers’ language” to reduce lawyers’ fees.
- Preparation for events – What collateral is required for a competition, pitch, conference, trade show, etc.? Review the material from an outsider’s perspective. Maximising the business benefit post event.
Typically the EiR will have some time free during the day in which to write notes of the meetings, identify common threads for potential training courses and speak to business owners who are available but unaware of the service.
What are the benefits?
- Business Owners will have better formed and executable ideas.
- CEOs may pivot earlier preserving cash for a new, better solution.
- Higher results in business competitions that the Host may enter.
- Improved visibility in the business community.
- Increased chances of Businesses being funded and exiting.
What are the keys to making this work?
The keys to ensuring successful help to businesses are:
- Availability. Business Owners need to know that there will be someone who can challenge, teach and have a dialog with them at a time convenient to them.
- No conflict. Since EiR’s fees are paid by the Host rather than any other organisation, their interests are aligned with the Host whose interests are aligned with the Business Owners. The Business Owner does not need to think about how they will pay at the time when they are most in need of help (e.g. just about to negotiate a contract with a client).
- Experience. Having founded and sold their own businesses, EiRs bring a wide range of experience and empathy to the Business Owners that they work with that can never be learnt from books.
The Entrepreneur in Residence or Executive in Residence is a role that accelerates the Hosts’ client businesses in the commercialisation and exploitation of their ideas for the benefit of all the stake holders. The Host benefits through the reputation and alumni network of the many successful entrepreneurs passing through their organisation.