Entrepreneurs in and out of residence — a dual perspective on the role of EiRs in venture creation
Article by Joao Ribas (Novo Seeds) and Martin Bonde (former EiR, BiOrigin).
Venture capital funds that focus on the venture creation model often build teams of entrepreneurs-in-residence (EiRs). These teams bring a wealth of knowledge and experience in managing biotech companies, which may otherwise be hard to recruit to early-stage company creation projects. By having a dedicated EiR team, venture capital (VC) funds leverage experienced management and/or pharma experts to boost the chances of success of early-stage company creation. We describe below the perspectives of both entrepreneurs and VCs on working together in venture creation.
The EiR perspective — time and space to create a new venture
EiRs generally join venture funds with two distinct approaches. Some are looking to find the next company to build and helm, while others join with specific ideas on what to build next. In both cases, partnering with a venture fund early on can expedite the venture creation process and leverage resources harder to find solo.
From a personal perspective, an EiR takes advantage of having no downtime between positions while continuing active employment until a venture creation project is founded and launched. Within the work EiRs do, there is also often flexibility to transition from one project to another if unsuccessful.
The support and backing of VCs also mean EiRs have more resources available. They can remain up to speed with trends and analysis on different investment areas and topics and can additionally tap into the VCs’ network as well as directly work with the investment team. This stands in stark contrast with solo entrepreneurs who, by comparison, have limited resources and bandwidth.
Working on venture creation projects with a VC can lead to a higher chance of closing a financing round. The early understanding of the investor perspective, as well as the EiRs’ experience, can help shape the strategy and development plans of venture creation projects in a more cohesive and comprehensive manner, potentially resonating better with other VCs. Furthermore, access to the VC’s network can facilitate discussions and syndication for financing rounds.
The Venture Fund perspective — an opportunity to build experienced teams early-on
Venture funds, namely the ones focusing on venture creation, often build or hire teams of EiRs (some funds may use the term Venture Partner). The make-up of said teams can be very diverse, including serial management teams from biotech companies (C-level) as well as industry veterans from pharma companies.
From the perspective of accessing talent, VCs that choose to have an EiR team often avoid lengthy and sometimes difficult processes of searching and hiring candidates for new projects. This early-on access to talent allows VCs to augment the working bandwidth they can take on, while simultaneously tapping into and securing talent as it becomes available. EiRs can also seemingly transition from one project to another in case of project attrition, allowing VCs to work faster and smarter by “recycling” management teams.
Key experts and management hired as EiRs can help shape venture creation projects early on, potentially giving them a higher chance of success or, at least, a faster process to reach a no-go conclusion. The operational experience of EIRs can also drive venture creation projects faster in the earlier stages, as well as avoid mistakes of more inexperienced teams. Finally, the VCs can also tap into the EiR’s network, making it sometimes easier to find talent or consultants for projects, hire and grow teams, or select the best providers such as contract research organizations and more.
One of the challenges venture creators face is early access to experienced management, to help build and drive new venture creation. Having a group of seasoned EiRs can help VCs drive venture creation projects forward, leveraging the EiR’s experience to shape projects and take the right decisions early on. Ultimately, the interactions between EiRs and VCs can accelerate venture creation and lead to higher chances of success for the benefit of both parties.
As a venture creator, Novo Seeds has built a team of entrepreneurs-in-residence — BiOrigin — comprised of repeat C-level executives and industry experts. Our EiRs are an important part of our venture creation initiatives and play a crucial role in building them. Muna Therapeutics, a company that recently raised a $73M Series A financing round, is an example of the role and impact EiRs can have on building biotech companies.
