To sum up, in one sentence – Venture studios also known as startup studios are companies that create new startup companies. Venture studios offer an innovative approach to startups by helping them to scale up and create a big impact.
How do they do that? – Venture studios do this either by generating new ideas for startups or by recruiting founders with ideas, and then they invest significant amounts of time, human resources, and capital in the process of scaling the startup up successfully.
How Do Venture Studios Work?
A well-defined process lies at the core of the work of every venture studio. There are generally four steps:
- Ideation – The process of coming up with a new idea or validating an existing idea from an entrepreneur.
- Productization – The process of developing the “minimum viable product,” or MVP, which is not the final version to get feedback from customers, and to get an idea of revenue generation.
- Launch – The process of creating and initiating a go-to-market strategy, including website design, development, sales, marketing, and customer support.
- Scale – The process of building around initial market success that will help the organization grow
The involvement of a venture studio in the startup reduces significantly the risk for investors, as the defined process and the team’s experience can help to avoid common mistakes that would cause the startup to fail.
What Does a Venture Studio Do?
To get the idea into the marketplace and to assess the scale-up opportunities, venture studios access skills, expertise, and a network beyond the founding team. This core value proposition of a venture studio reduces risk and enhances the outcomes by equipping a startup with resources they usually cannot afford early on:
- Venture studios have skilled teams that help the startups to execute the work on time. Startups do not have to go through trial and error and the process of hiring and recruitment at the early stage of building up.
- Venture studios have well-defined processes and tools to obtain results more quickly. These processes and tools come from their distilling experience.
- Venture studios have the “roll up their sleeves” attitude in turbulent times. They give hands-on guidance to reduce any risk and suggest ways to scale up. They provide accelerated mentorship and market-pro advice to founders.
- Venture studios support you as a founder by figuring out ways to get investors to fund your business or how to convince someone to invest in your product. You get to focus fully on leveraging the skills, expertise, and network of the studio to build your startup.
How Many Venture Studios Are There?
According to Enhance Ventures, around 724 studios are operating across the globe. Europe now has more Venture Studios than North America. The studio movement seems to be accelerating with over 50% of the studios having launched in the last 6 years and the boom has continued through the Covid-19 pandemic.
Venture Studio vs. Incubator vs Accelerators: What’s the Difference?
Startup Incubators – It’s a collaborative program that is designed to help new startups succeed. In the incubators, entrepreneurs usually meet with startup projects in a very incipient phase. Incubators help entrepreneurs in handling problems commonly associated with running a startup in its early stages by providing a workspace, seed funding, mentoring, and training. The sole purpose of a startup incubator is to help entrepreneurs grow their businesses.
Startup Accelerators – They only support early-stage companies to help them grow through connections with other industry players, mentors, and funding. Startups usually have accelerators for a fixed period.
Venture Studios – They are organizations that create companies either by using their ideas or by helping entrepreneurs validate their ideas. They invest in startups by bringing in resources to validate ideas, build up investment proposals, help startups connect with prospective investors, bring in skilled resources to build the web presence of the startup and bring their product/service to market. They also offer post-launch support in maintaining the website and customer relations.
Venture studios develop many companies at once unlike incubators and accelerators by allocating operating resources and capital to those companies.
Venture studios are considered as co-founders who help companies – raise capital, offer staff resources, design business models, work with legal teams, and create minimum viable products (MVPs). They also play an active role in creating the marketing strategies of the startups they launch.
