Venture studios work with different startups to activate a portfolio of ideas into reality.
They invest financial capital, then use a long-term lens to enhance the chance for traction by pouring resources into each startup they invest in. A compounding collection of services are provided within these funds and full access helps everyone building together, often in sprints.
The compressed nature of the building process makes venture studios somewhat comparable to accelerators, yet with an extended, almost open-ended timeline. This emerging model can also be used as a form of due diligence for venture capital funds. While there’s still a lack of standardization and wonky economics have some investors questioning the long-term mechanics of such an approach to investing in startups, it’s no surprise that the innovation economy continues to drive fresh approaches to raising financial capital through the art of supporting entrepreneurs.
This caffeinated contribution was written by Miles Dotson. I met Miles through mentor madness with Techstars. We bonded over our shared interested in this emerging approach to supporting entrepreneurship. Miles co-founded Devland, which is an investment company that focuses on new innovative ventures with brilliant technologists and wildly underestimated entrepreneurs. Devland provides an alternative mix of investment pathways for committed entrepreneurs with program guidance and direct funding through Series A.
The builders venture studios can attract, do not always have familiarity with venture capital and the language of finance. Whether you call them venture studios or startup studios, the word “studio” gives them the sense that there is a seat for them, regardless if they have a passion for a new idea or if they have formed initial traction. Terms, timelines, and investment theses vary between venture studios, as they should, knowing each company and fund provide different strategic values. After years of experimentation, our team is currently using the venture studio approach to conduct due diligence over an average of 14 months, working alongside builders, getting in the trenches with them, and advocating for their growth. This provides a much better gauge of the entrepreneur as a corporate builder, leader, and team builder — further validating our cause to invest and market them to firms upstream from us.
To bring this short intro to venture studios together, we can think about this as a validation-led approach to venture capital. The intention is to discover outsized returns from potentials who do not generally have network into the world of capital, relationships, and resources needed to build a market leading business. We are operators, product leaders, and venture capital thinkers who understand the role startup creation plays in the market. Our goal is to illuminate repeatable paths that often result in early acquisitions, stable long-term growth, or public market entry while improving the average cost required to create that outcome.
This has been a fun little series, brewed around a few interesting actors within entrepreneurial ecosystems. There are many more key actors, factors, and instigators throughout any startup community, but we hope you’ve enjoyed this sip of awareness around Accelerators + Incubators + Coworking + Venture Studios. As always, subscribe to Roasted Reflections and stay tuned for what’s being poured next week!