People often ask me, “what’s the difference between a venture partner and an entrepreneur in residence (EIR)”? Patrick Lor joins the iNovia team as an EIR as of this month, so I’ll use Pat’s work with iNovia as a case study to address this question.
Pat has been a venture partner with iNovia for some time. Venture Partners are individuals we work with to expand the areas in which our fund can competently invest. They’re usually repeat entrepreneurs with whom we have longstanding relationships, and are often active angel investors in the areas in which our funds focus. As with Pat, they’re generally also investors in one or more of our funds, which assures an alignment of interest. Most Venture Partners are otherwise fully employed so we need to be judicious with our demand on their available time; this often means including them in diligence with a company only after it has been fully screened. In some cases, our venture partners will invest in companies we’re looking at along-side the fund, and occasionally the companies will leverage their expertise by bringing them onto the board of directors.
Pat was an early executive and key member of the team that grew iStockPhoto, which sold to Getty Images for $50M in 2006. He’s been a prolific angel investor, has been a tireless evangelist for entrepreneurism and startups across Canada, and worked with iNovia to help assess multiple investment opportunities. More recently, Pat was the President of Fotolia North America, and through these varied experiences he has gained an unparalleled understanding of the practical workings of online marketing in all its evolving forms. Effective marketing and customer development as a company scales is difficult and we’ve seen that many companies are successful when dealing with one or two lighthouse accounts on a direct basis, but are unable to ramp effectively. Having seen and managed high volume Internet marketing and customer development, Pat has learned many lessons that I’d like to get into the hands of my startup CEOs. He is also an incredibly creative, intelligent individual that has the ability to balance optimism with a practical, critical perspective when working with management teams to flesh out innovative business models, develop KPIs and build business development plans.
An EIR is someone who we want a closer relationship with on a day to day basis for any one of several reasons. In Pat’s case, we want to share his valuable marketing and business-building experience with our portfolio companies to accelerate their growth. A perfect fit for Pat. Pat has agreed to allocate half of his time over the next year to this work with us, and is already engaged with several of our portfolio companies across North America. We’ve developed a three month program specifically for our Internet startups that helps them develop an online marketing program informed by the latest lessons on what works, and what doesn’t, in this quickly changing space.
In general, EIRs are viewed in venture funds as being “transitional” roles rather than long term career positions. I expect that as with all team dynamics, Pat is likely to end up more or less involved with a given company as much due to chemistry as anything else. We have specific objectives for value creation within our portfolio, and have outlined a year of work to this end but we’ve also agreed that the door is open because any good EIR is, well, an entrepreneur at heart!
Success in any human endeavour hinges centrally upon getting the best available people situated where they have the most leverage. Our EIR program is an application of this principle.