Paid to have an office in the VC firm and sit in on pitch meetings with new companies. May help bring new deals to the partners. May have his or her own companies that may or may not be funded by the VC in question.

The local state owned biotech investment fund calls them "Executives in Residence" which I think is really funny.

http://en.wikipedia.org/wiki/Entrepreneur_In_Residence

Often, EIR's are paid to sit in VC firms waiting for a company that could use their talent. By virtue of their position, they get to see every cool company in the community and pick where they want to go next. If they aren't dropped in as an exec in a single company, they divide their talent amongst many companies -- working with them to develop the business. Of course, no titles are clear at VC firms.