The “War for Talent,” a term first coined by McKinsey in 1997, is gripping tech’s capital allocators, creating a superabundance of options for early builders. Whereas a founder might once have hoped for a spot in “Cambridge Seed,” the precursor to YC, budding CEOs can now choose between an incubator, accelerator, Entrepreneur-in-Residence (EIR) role, or venture studio gig.
- For smaller funds, an EIR program offers a chance to “buy” into a deal they might not see or win otherwise. In exchange for taking on added risk — nothing may come of such an engagement — a smaller player seals their spot at the table.
- For larger funds, these programs often look like an options strategy. For billion-dollar vehicles, deploying $250K is useful only in that it may smooth the road for a $5M, $10M, $50M investment later on.
- Broadly speaking, launchpads and studios are on opposite ends of the spectrum.
- The former tends to be less structured and better-suited for early ideation, while the latter leans towards the more formal and often either expects or prescribes a business idea.
- The structures mentioned above provide different benefits and drawbacks, suited to differing styles of builder.
- While some may wish to work on an idea that is uniquely their own, others may prefer to be set loose on a de-risked, pre-vetted notion.
- Though ownership may be the highest priority to one CEO, another may be glad to give up a percentage in exchange for more guidance and support.