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
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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 email@example.com