Do venture studios have a higher success rate ?

From the outside, everything appears to be simple. In his twenties, an entrepreneur with cutting-edge technology and venture financing becomes a millionaire. Building a new startup from the ground up is a tough challenge.

However, emerging evidence is emerging that venture-backed startups fail more significantly than the sector reports.

A lot can go wrong, especially if you’re a first-time entrepreneur, from assembling the right team to raising money. However, with 90% of businesses failing, it’s critical to identify where we’re failing – and how we might improve.

While venture funds and angels play an essential part in the venture ecosystem, they are not the best answer for every problem. Instead, we must investigate new methods to establish successful businesses, and approaches that apply to structural difficulties in the startup life cycle.

Enter Venture Studios. The approach, often known as a startup studio or venture builder, was pioneered by Idealab in 1996.

For the last ten years, the Venture studio model has been quietly developing – and dominating. If you’re wondering what venture studios are and why they’re garnering the attention of senior entrepreneurs and established businesses, let’s dive into the blog and learn what a venture studio is and how they are achieving higher returns than a VC.

What exactly is a Venture Studio?

A venture studio, like IHQ, is an organization that help build successful companies. Whether their teams or part of a bigger corporate innovation division, studios use internal and external resources to strategies execution, pair them with seasoned team, and assist them in success.

But a lot going on behind the scenes makes studios so appealing. In exchange for stock in the future business, these internal resources encompass anything from tech stack or sales knowledge to marketing resources, HR infrastructure, and legal advice. It could be a terrific deal for the startup, the studio, and the investors.

What distinguishes Venture Studios from Venture Capital?

Venture Capital firms often act only as stakeholders, acting in the background as relatively silent partners. Though money from a prominent VC firm may draw some good attention by lending legitimacy to the initiative, this form of structured investment has a few additional advantages.

On the other hand, Venture Studios are more involved in projects and enterprises from the beginning, taking on executive roles and offering additional in-house resources. The VC Studio model’s command also allows for greater flexibility in meeting certain milestones on time.

Do venture studios have a higher success rate?

The venture studio is not a new concept, but it has renewed interest, and it is due to the company’s sustained performance over the last few decades. According to a report, just 9% of the 415 firms incubated by startup studios have failed, 3% have exited, and the rest are still operational, and companies that are still in operation generate income, with an average typical revenue of $1,117,997 in a year. As a result of their success, these firms have produced 2,078 new positions that did not exist just a few years ago.

Veteran entrepreneurs and venture studio supporters attribute the success of venture studios to their early engagement in the firm life cycle and their high-touch management style. Rather than focusing on already-established businesses, studios only invest in startups that have defined their idea, undertaken market research, confirmed customer demand, and adjusted their plans accordingly.

The surge in interest in studios is also closely linked to developments in the venture environment. Startups and corporations must discover more effective methods to compete as platform giants employ their near-limitless resources to disrupt sectors. The studio model provides them with experienced leadership, simplified resources, and market validation, making success accessible and repeatable.

Why Investors should invest in Startup Studios?

Startup studios have repeatedly been shown to be the winning approach for developing successful startups with high returns on investment.

The most important reasons why investors should invest in startup studios:

1. Lower Risk

  • 60% of studio-created businesses make it to Series A.
  • Compared to the usual startup-building strategy, startups that come from a studio are 30% more likely to succeed.

2. Increased Profits

  • Studios retain an average of 20% stock in the firms they bring to market, giving investors a cheaper valuation with higher equity multiple.
  • The average IRR of studio-born businesses is 53%, whereas standard VC-funded startups have a 21% IRR.
  • Studios build venture-scale businesses rapidly and precisely. They give portfolio firms a strategic advantage at every step of their growth.

End Note

Studio-based companies are more likely to succeed than traditional startup development because they use established procedures, deep subject expertise, solid networks, and pooled resources. Furthermore, studio-born companies have been shown to exit faster with greater returns than typical startups. Studios build venture-scale companies with speed and precision.


Venture Studio Model vs Venture Capital Fund

What is a Venture Studio?

A venture studio, also called a startup builder, is a company that enables startups.

In value creation, a studio differs significantly from venture capital firms. Venture studios, like IHQ Studio, create considerable equity value through their operation as co-founders because they concentrate on starting new businesses.

The Venture Studio Model aims to improve how scalable and revolutionary businesses are created. As a result, studios add 10 times as much value to a project compared to what a venture capital fund could do with only its financial resources.

According to GSSN, there are currently 560 venture studios worldwide.

Almost every business that emerges through a venture studio raises a seed investment, and 72% of these businesses go on to raise a Series A round. According to venture capital firm High Alpha, “startups established by studios have an average IRR of 53%, compared to 21% for non-studio startups.”

Due to the difference between studios’ founder function and venture capital companies’ pure securities selection role, these fundamentally distinct dynamics arise.

We are sure that the Venture Studio model is the best strategy for achieving the ecosystem’s game-changing breakthrough.

Benefits of Venture Studio 

  1. Less expensive to invest in equity:- Venture studios often own a higher equity stake at a lesser cost to their investors. The percentage of equity a studio maintains typically ranges from 20 to 95 percent.

    On average, venture studios hold 30 to 50 percent of the equity when a startup begins to raise outside financing, and they are exempt from paying a premium for the equity.
  1. Teams with talent and diversity throughout the Studio:- Finding and integrating the right people into a startup is grueling. For an experienced person, joining a startup is frequently a significant step and is commonly seen as a high-risk professional decision.

    However, this risk perception is considerably reduced when a person enters a startup that a venture studio supports because the venture studio’s portfolio contains additional chances that may become available even if the present startup fails.
  1. The startup’s lower risk profile:- The risk profile for a startup is lowered by the added expertise, marketing team, financial resources, access to more people, and technological advancements.

    Additionally, with a typical startup, there is a chance that the founders will give up when things get complicated. Since the founders are a part of a bigger group with venture studios, this risk is also diminished, but even if it does, the venture studio can assist in assembling a new founding team.
  1. Partnerships with successful entrepreneurs:- A venture studio is designed to be the ideal co-founder for the startups. It is one of the key distinctions when contrasting the Venture Studio business model with accelerators or venture capitalists. 
  1. Accelerated scale-up:- Once the startup has launched and has gained some positive early traction, venture studios can increase that traction by giving the startup additional money and more resources or even by forming quick alliances with other enterprises.

    The management team may concentrate on fast expanding the business rather than on administration and fundraising, which is the main benefit.
  1. A fast approach to the market:- A new startup can be launched significantly more quickly with the assistance of venture studios than with the ordinary founding team. Successful venture studios can provide speedy MVP development, help with company creation, access to talent, and knowledge sharing on business concepts.

    Venture studios frequently have access to highly skilled personnel that most early-stage startups cannot initially afford.
  1. Greater success rate:- The Venture Studio Model generally has a higher success rate than other entrepreneurial models. Studios receive a 34% exit rate globally compared to 21% for accelerators and 19% for the average venture business offering greater investor returns. The venture industry average is 21%, but when looking at studios, it increases to 55%.


When compared to other venture capital funds, The Studio’s fund stands out for the following reasons:

  • Operating as a co-founder, The Studio significantly increases equity value.
  • The Venture Studio concept seeks to minimize that risk while maximizing learning opportunities.
  • Within the venture ecosystem, studios are sensible. In emerging markets, where unpredictability is more significant, and a thorough understanding of the situation and the people involved is required, this model is even more effective.
  • Leadership and the staff at the Studio have a lot more at stake and are taking on a lot more risk in the negative.
  • IHQ Studio builds companies by providing capital and a CMO team that closely collaborates with the startup as the founding team and aids in developing a best-in-class customer acquisition strategy, including brand story, designing, streamlined campaigns, and execution, as well as PR, Web, and SEO.

Looking for a Co-founding partner or want to invest in the startups? Connect us at