Successful entrepreneurs have unique experiences that make them invaluable resources. To implement entrepreneurial mindsets into their companies, firms big and small hire former business owners through entrepreneur-in-residence programs.
An entrepreneur in residence can bring on innovative ideas, offer new product solutions, and add significant value to your business.
Table of contents:
- What is an entrepreneur in residence?
- What does an entrepreneur in residence do?
- Benefits of an entrepreneur in residence
- How to find an entrepreneur in residence
- Entrepreneur in residence in a startup
- Entrepreneur in residence salary
What is an entrepreneur in residence?
An entrepreneur in residence is a temporary position at an organization that primarily identifies market opportunities and creates new startups. Often filled by an experienced entrepreneur, an entrepreneur in residence can also help a company research markets, identify problems, create solutions, and commercialize ideas.
Though entrepreneurs in residence typically work with VC firms, the role has expanded to include many different organizations, including:
- Law firms (e.g., Fasken Martineau)
- Governments (e.g., Amsterdam, Netherlands)
- Universities (e.g., Stanford Graduate School of Education)
- Charities (e.g., The UK's Royal Society)
- Corporations (e.g., Coca-Cola and Target)
What does an entrepreneur in residence do?
The role of an entrepreneur in residence differs depending on the organization. However, some entrepreneur-in-residence responsibilities include the following:
Create a new company
At a VC fund, entrepreneurs in residence traditionally create new companies. Rather than looking for a promising young company and then evaluating the leadership team of that startup, venture firms identify an individual with proven abilities and ask them to create their next business.
The entrepreneur and their venture remain independent, but they get the opportunity to develop their vision with support and investment from experienced VCs.
This is also the function of entrepreneurs in residence at Wilbur Labs, a San Francisco-based startup studio that specializes in building startups from scratch. To date, the studio has hired several entrepreneurs in residence to research, build, and launch new companies alongside their team. These entrepreneurs in residence:
- Lead research through consultations with industry experts and potential customers
- Help define the go-to-market strategy
- Develop a financial model for the new business
At Wilbur, as with most VC firm programs, the residency ends when the startup launches. However, the entrepreneur in residence may stay on in another capacity.
Entrepreneurs in residence can often double as mentors. Startup accelerators and educational organizations hire entrepreneurs in residence to support first-time founders.
At the University of Edinburgh’s Edinburgh Innovations, founder and academic Lysimachos Zografos uses his role as an entrepreneur in residence to help academics turn their research into startups. He has worked on projects ranging from new drugs and digital therapy solutions, to AI that uses satellite images to assist with natural disaster responses.
Before the entrepreneur in residence role existed, the university already had a technology transfer office responsible for the commercialization of research. But Zografos brings an entrepreneurial approach to the way that service is offered.
Offer operational support
Entrepreneurs in residence typically focus on creating businesses rather than running them, but they can take on a more operational function. VC firms may bring in an entrepreneur in residence to manage one of the companies they’ve invested in.
At Wilbur Labs, once the new startup has been launched, the entrepreneur in residence may stay on as a full-time employee, an adviser, or even CEO. They might take ownership of core functions of the startup, such as product, growth, and business development. Alternatively, having reached the goal of launching a new business, they may move on to other projects.
An entrepreneur in residence could also help solve a specific problem. If a business starts losing clients to a competitor or struggles to find investors, they could bring in an entrepreneur in residence to tackle that issue.
Some entrepreneur in residence programs select promising candidates and help them become successful entrepreneurs by providing resources and mentorship. In this case, the entrepreneur in residence takes on the role of mentee rather than mentor.
Schmidt Futures, founded by former Google CEO Eric Schmidt and his wife Wendy, offers an entrepreneur in residence program that acts as an incubator for promising social entrepreneurs.
Benefits of an entrepreneur in residence
Big corporations increasingly find their biggest competition to be disruptive startups, says Trends member Mike Stemple, a serial entrepreneur and one of the first corporate entrepreneurs in residence.
Entrepreneurs in residence can help larger firms stay competitive by heightening the organization’s innovation and creativity. That could mean developing a new product, helping the business react to a supply chain challenge, assisting with the acquisition of a startup, or helping executives understand the mindset of their startup competitors.
Help solving problems
Entrepreneurs inherently tackle problems with a solution-driven approach: They dig deep into the problem, brainstorm different solutions, and figure out how to make their ideas a reality. An entrepreneur in residence brings this solution-oriented mindset to their organization they join.
As Stemple puts it, "entrepreneurs are like a multi-tool. The whole world looks like something we can fix."
Employees may struggle to offer new perspectives after working somewhere for a long time. Hiring an entrepreneur in residence can add a fresh perspective to your organization. They bring in leadership, industry knowledge, project management skills, and more.
If your team struggles to find a solution to a problem, an entrepreneur in residence can potentially point your team in the right direction with new ideas.
Assistance with operations
An entrepreneur in residence could help oversee and manage an aspect of the company, such as product development or customer research. Unlike hiring an employee, bringing in an entrepreneur in residence adds a distinct level of leadership and flexibility to your management team.
Entrepreneurs typically have to deal with volatile markets, the ups and downs of building a product, and other challenges, making them adept at taking on managerial responsibilities.
Valuable industry knowledge and connections
An entrepreneur in residence can bring invaluable industry insight, contacts, and practical advice. They often have a deep understanding of market conditions, current competitors, products, and customer demands in their industry.
Entrepreneurs must deal with investment when growing their startup, from private investors to VCs. An experienced founder can assist the organization when it seeks outside investment.
How to find an entrepreneur in residence
You can look for an entrepreneur in residence the same way you recruit for any role — by posting an ad on job boards, LinkedIn, or on your company website. You can also use mentorship services like Oneday, reach out to your network for suggestions, or approach entrepreneurs directly if you feel they might be the right fit for you.
The ideal entrepreneur in residence for your startup will have proven, relevant success. Preferably, they will have founded (or been involved with the launch of) multiple successful businesses. Stemple says that true serial entrepreneurs should have a minimum of three positive exits. "One is a fluke. Two is chance. Three is a trend."
When Wilbur Labs hires an entrepreneur in residence, they look for someone with "deep industry experience" in the market the firm wants to explore, because they want someone who will be passionate about the specific problem they’re trying to solve.
At Oneday, a firm that helps people find entrepreneurs in residence, it concerns itself instead with industry knowledge. They try to match founders with mentors who have experience with a broadly similar business model, such as an app, an ecommerce business, or a SaaS company.
Of course, anyone you work with should also be a good personality fit for the role you want them to fill. Not all successful founders are natural mentors, for example.
Entrepreneur in residence in a startup
In startups, entrepreneurs in residence can act as mentors, using their expertise to guide founders on their business journey.
"The two questions that founders ask most often are 1) 'Is my idea good enough?' and 2) 'How do I turn that idea into an actual business?'" says co-founder of Oneday, Taras Polischuk.
According to Polischuk, if you’re a rookie founder, an entrepreneur in residence can help you:
- Validate the business idea.
If you’re wondering, "Is this idea even worth trying? Is the market big enough? How strong are my unique value propositions?" — then you may want to explore those questions with a mentor before getting started.
- Create an action plan.
A mentor can help you prioritize the right things and figure out the best sequence of actions.
- Avoid common mistakes.
First-timers might, for example, spend too much money building out a prototype before testing the concept on customers. A mentor could warn against that.
Entrepreneur in residence salary
Entrepreneur in residence salaries vary widely depending on the nature of the role. At a VC firm, entrepreneurs in residence do not always receive payment. Their role might come with office space, administrative support, and a small stipend. In this case, the entrepreneur in residence benefits mainly from the ability to build a new venture with investors already on board.
On the other hand, a full-time corporate entrepreneur in residence could earn $300k/yr. In that case, the corporation may own all the IP created by the entrepreneur in residence.
At Wilbur Labs, entrepreneurs in residence are initially brought in as contractors for $100-$200/hr. If they are successful in launching a new startup, they may end up staying on as a full-time employee, in which case they would earn roughly $150k-$250k/yr., plus equity and benefits.
As an adviser to a startup or a mentor to a first-time founder, an entrepreneur in residence can earn $50-$200/hr — depending on their experience and what the role entails. If you’re an early-stage startup and that sounds out of your league, there is good news.
"There is so much goodwill in the market that it’s very easy to attract entrepreneurs in residence," says Polischuk. "Most of them aren’t doing it for the money. They’re doing it to give back, to help the next generation of founders, and to feel [like they are] part of this community."
The other option, if you can’t afford to pay an hourly rate, is to remunerate your entrepreneur in residence with equity (i.e., a share of your business). That way you won’t need to dole out any cash and the entrepreneur in residence will be incentivized to guide your startup to success.