To an entrepreneur, Steve Blank says, being asked to join a venture firm with an Entrepreneur-in-Residence title means you have been tapped on the shoulder by the VC gods:
It means you get to sit at a venture capital firm (some even pay you for the privilege) and stay until you have come up with an idea for your next company or have joined a company you’ve met as they passed through the VC’s offices. Depending on the size of the venture firm they may have one to three EIR’s who stay an average of a year or so. It really means that the VC’s would like to own a piece of you.To a VC it’s a cheap investment, and if they somehow don’t bind you to their firm, someone else will. In reality an EIR is a set of wonderful golden handcuffs. Of course no VC firm will come right out and say, “If you’re an EIR for us you can’t do your next deal with any other firm.” Hmm… You’ve taken their money, eaten their food, sat in their meetings and you are going to take money from someone else? They have your soul. It sounded like a great deal. I had no idea what I wanted to do next, and would get paid to think about it? How could it go wrong? Little did I know.
Read the whole story, but I’ll skip to his lessons learned:
- Your level of due diligence should be commensurate with your position in the company and proportional to the reality distortion field of the presenter
- Never join (or start) a company whose business model you can’t draw
- Subjects in which you are not a domain expert always sound exciting
- Sleep on any major decision