Venture Studios and more
Shortening VC Learning Cycle
If you are in venture investing or entrepreneurship space, you might have come across the term venture studios or builders; they are mushrooming across the world, but specifically in the US, Europe, and SEA. Though it is still at a very nascent stage - there are only 200-300 Venture Builders or Studios. I am sure you must have heard of Rocket Internet, it's a classic example of venture builder.
“..a Startup Studio is heavy on “The Guild” element and low on “The Funding” factor- this Studio is going to be super hands-on but not supplying much in terms of financial capital. Conversely, if the Studio is heavy on “The Funding” factor but weak on “The Guild” element they’ll look more like a Venture Capital firm than a Startup Studio.” ~ Roamy, How To Differentiate Startup Studios
What is Venture Studio?Venture Studios, which are also called Venture Builders, are an exciting breed because all of them are similar in what they do, but every single one of them has a distinctive business model and flavor to it.
Venture Studio model is a new and emerging model in this space, which means building ventures from scratch and finding operating teams and CEOs to take it further after 9 to 12 months of seed support and venture building.
There are two routes of establishing yourself in the venture building space: Corporate or Business-line Innovation - Working with corporates and family offices do rapid prototyping and helping them spin-off companies, which add strategic and financial value to their existing business line.
Start one company, build it to scale - raise a substantial amount to Series B or C, then start finding out ways to either replicate the company into other geographies or enter into cross-sectors.
Three interesting ones that I come across this week are: Rev1: Here is a podcast on Rev1 with its senior VP Strategic Partnerships. What I got a sense about Rev1 is that it's a venture studio and consulting firm; they consult big companies to do corporate innovations, spin-off companies, as well as manage the corporate venture funds as CVC. So, in essence, a venture studio, consulting firm, and a venture fund. It's very similar to the model that Moonshot Ventures is envisioning.
Betaworks: Betaworks is one of the poster boys of this whole venture studio industry, started as building one app, and then lead to building multiple apps and ventures. Now, they make ventures, run accelerators, and invest in ventures. They have a fund of USD 50 mn. Here is a great podcast hosted on Seed to Scale podcast with the founder and CEO of Betaworks.
Startupbootcamp: The third one, that I came across is not any sense venture studio, but it's interesting to note as their core model is selling cohorts to corporates for corporate innovation. They have been quite successful in doing with various insurers and other MNCs. They have this product or service called Colab, an innovation program for mature markets. It provides established industry players early access to relevant growth stage companies. Through a theme-based approach, Colab equips corporates in mature markets with the capability to create engagement and solve real business problems. A great podcast to understand the landscape of accelerators, innovation hubs (though it's focused on InsurTech)
Reference linksI am continuously looking for first-time fund managers and venture builders who are looking to create their first-time impact funds or venture studios with an edge or a differentiated value proposition in emerging economies. If you are building one, please do write to me. I would love to learn more from you and would be happy to help in any way.
With Love,
Sagar
About
"first followers" is founded by Sagar Tandon, a founding member at Moonshot Ventures. You can reach him at sagar@moonshotventures.org.
Occasionally, he blogs about the responsible investing, tech for good, venture capital, investment thesis, conscious capitalism, collaborative consumption, community, and humane lifestyle.