Sachin Rekhi

After last week's post I got quite a few folks asking me what exactly is an Entrepreneur-in-Residence. Since I didn't describe it in my previous post and there isn't very good information out there about the role, I thought I would provide an overview, it's benefits, and drawbacks.

As many of you know, I spent the better half of 2009 as an Entrepreneur-in-Residence at Trinity Ventures. It was one of the most rewarding experiences I've ever had and would encourage anyone who gets the opportunity to do it. Working alongside Gus Tai, Ajay Chopra, Jim Tybur, Dan Scholnick, and the rest of the Trinity team provided an inside look into the world of venture capital. Given that I've spent most of my entrepreneurial career in scrappy startup environments, I developed a valuable new perspective on evaluating opportunities.

I thought I would take a moment to share some of the most compelling lessons I learned during my Entrepreneurship-in-Residence.

While I am a big believer that entrepreneurs should spend the majority of their time focusing on getting a quality product to market, one piece of overhead that should never be overlooked is incorporating or forming an LLC prior to product launch. To some this is obvious. Of course you setup your corporate structure before anything else. But to hackers and hobby programmers this may not be their first instinct. Sometimes you have a hobby website that just starts taking off and you never planned on it being a real business. But then it starts to become one and you may not have the protections incorporation affords.

I'm often asked about my Y Combinator experience so I thought I would take the time to blog about it. I did Y Combinator the Summer of 2007 in Boston with two awesome co-founders. We built Anywhere.FM, a web music player that brought an iTunes-like experience to the web, and eventually sold it to imeem.

So what is Y Combinator? Y Combinator is a new kind of seed stage venture firm. While they provide financing and advice like all venture investors, their model for doing so is very different. They give small amounts of cash (<$20,000), take small amounts of equity (<10%), and fund startups in batches twice a year. These summer and winter batches bring all the entrepreneurs in a given batch together in Silicon Valley for 3 months to have each startup build a demo-able product to show off to investors at the culminating Investor Day in hopes or raising a follow-on angel or VC round.

I would break down the value of the Y Combinator experience into four main benefits: jump starting the startup process, access to a fraternity of entrepreneurs, investor day, and funding.