Our venture studio creates startups, typically by providing the initial team, strategic direction and capital for the startup to reach product-market fit.
Distinct from the venture capital approach, our venture studio is closely involved in the day-to-day operations and strategic decisions of growing the new business.
After the startup shows traction, it can seek to raise capital from outside investors, including VC’s.
The venture studio’s employees can decide to stay in the portfolio company or return to the studio to work on a new startup.
Our venture studio model is also different than our startup accelerator. Our Accelerator provides a 12-week program and initial seed funding ranging from $25,000-$125,000 in capital in exchange for a set amount of equity. The program provides training and guidance to validate the business. At the end of the program, the our accelerator has a Demo Day where investors can learn about the latest startup batch and hopefully invest in the accelerator’s portfolio. Our accelerators tend to focus on spreading small amounts of capital across a wide array of startups with the expectation that most will fail.
Our Venture Studio takes a slightly different approach, focusing more resources around opportunities that we identify as ripe for a startup to capture. Unlike our accelerator, our venture studio also does not typically accept applications for new portfolio companies, as our venture studio’s strategic insight and ability to select opportunities is a part of the value we bring to our investors.
Today there are two main types of venture studios we have:
Independent Venture Studios
Corporate Venture Studios
Our Independent venture studios provide all the resources needed to launch a new startup including the team, strategic direction and capital from their own balance sheets. They may have raised outside funds and have LP’s (outside investors), but usually we as principal of the venture studio make the final decision on what startups to spin-out and the amount resources to allocate as these new businesses gain traction. Our Independent venture studios are, in essence, a more vertically integrated approach to the traditional venture capital model of starting a new business from scratch.
Compared to the independent model, corporate venture studios provide a hybrid mix of talent, capital and strategic direction in cooperation with a mid to large size enterprise. Corporate venture arms will often provide initial capital and strategic direction to a corporate venture studio who brings the talent, process and know-how to build a startup. This model differs from a corporate venture group’s traditional focus: to invest in startups. Instead, the corporate venture studio model allows the enterprise to have a majority ownership stake in the new startup business. As a result, the risk-reward balance is much different. Instead of investing in a business that already has initial traction and has been vetted by an institutional venture-capital investor, this model allows the enterprise to take on additional risk in exchange for more upside, an increased ownership stake and more control. While large companies excel at incremental innovation that grows the core business, they have long struggled with how to capitalize on industry disruption and embrace new business models. This innovator’s dilemma is not new, but our venture studios have emerged to help big companies harness the big advantages they have in starting new businesses while helping to address some of the challenges and risks that any new venture brings.
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