Venture Studios: Should You Join as a Founder?

What is a venture studio?

A venture studio is a company that creates multiple startups by generating business ideas, matching those ideas with founders and skilled teams, and providing essential resources for growth. The business ideas may originate from the venture studio’s internal team or be proposed by external founders.

What type of entrepreneur is a venture studio suitable for?

Venture studios are suitable for entrepreneurs who have the ambition to operate and grow a startup but lack a specific business idea of their own.

What are the advantages of joining a venture studio?

1. Reduced Risk: Founders can benefit from working on a startup with a business idea validated by the venture studio team’s extensive market research and demand analysis.
2. Financial Support: Many venture studios offer competitive salaries and benefits packages to support founders' living expenses, enabling them to focus on building their startups.
3. Extensive Resources: Founders can leverage shared resources in technology, legal, finance, HR, marketing, and more, offered by the venture studio. 
4. Experienced Mentorship: Founders can receive valuable guidance and advice from someone with entrepreneurial experience and industry expertise. 
5. Accelerated Growth Opportunities: The venture studio’s strong connections with investors and partners help startups grow more quickly.

What are the disadvantages of joining a venture studio?

1. Smaller Equity Share: A major disadvantage for founders is that venture studios often take a larger share of the company than accelerators or incubators.
2. Limited Autonomy: Since the venture studio holds partial control over the startup, founders may experience reduced decision-making power. 
3. Unequal Resource Distribution: As venture studios typically work with multiple startups, some may not receive the same level of attention and resources as others. 
4. Potential Expertise Mismatch: If the venture studio lacks specific expertise in your startup's industry, the support it provides may not be effective. This will limit the startup's potential for success.

What percentage of equity do venture studios take?

According to a survey conducted by Global Startup Studio Network (GSSN), venture studios typically take between 15% and 80% of equity, with an average of 34%. For example, Hexa takes 30% of equity. 

What questions should you ask a venture studio before joining?

1. What is the venture studio's track record? 
2. What resources and network will the venture studio provide?
3. How does the venture studio recruit founders and advisors? 
4. Is the program full-time and in person? 
5. What is the typical timeline? 
6. How is the equity split between venture studios and founders? 
7. What is the venture studio’s level of involvement in startup operations and business decisions? 
8. How does the venture studio handle exit strategies?                                                                                                                                        

What are some of the well-known venture studios?