Venture Building 3.0: The Rise of Studios, Operational VCs, and new Corporate Collaboration

Exploring Different Co-Creation Approaches in Venture Building

Along the ventures building journey there are a lot of different approaches to engage and co-create. I list the most 5 common ones.

1. Venture Builders / Company Builders / Venture Studios Venture Builders (or Company Builders or startup studios ) are organizations that create startups from the ground up. They systematically identify ideas, build teams and ship products / services and whole startups (sometimes internal only, sometimes in co-creation etc.). Venture Builders delivery and retain significant equity in the startups they create, providing resources like HR, legal, marketing, and product delivery / technical services. Unlike traditional venture capitalists, they are deeply involved in the day-to-day operations of the startup, often taking on a co-founder role.

2. Incubators Incubators typically provide a nurturing environment for startups during their very early stages. Startups enter the incubator with a concept and receive resources such as office space, mentorship, and small seed capital in exchange for equity. Incubators support the ideation and product development stages but do not often stay involved through scaling and operations.

3. Accelerators Accelerators help startups grow rapidly through short, intensive programs focused on scaling the business. These programs, which usually last a few months, provide mentorship, capital, and connections to investors. In exchange for equity, accelerators offer a structured curriculum to help companies refine their business model and prepare for the next round of funding.

4. Venture Capitalists (VCs) Venture capitalists provide financial investment in exchange for equity in startups. Unlike Venture Builders, VCs invest in startups at various stages of development, typically during their growth phase. They provide funding, advice, and access to networks but do not usually get involved in daily operations. VCs expect high returns, often through exits like mergers, acquisitions, or IPOs.

5. Venture Clienting Venture clienting is a relatively new model that enables corporations to become early customers of startups, testing their products in real-world environments before taking equity. Instead of making a financial investment, corporations buy the products or services developed by startups, giving them the opportunity to validate their market without long-term capital commitments. So with Ventures clienting, the corporate acquires a product from the startup, without buying equity. This allows corporations to act as clients first, and potentially invest later if the product proves successful. For startups, this is an effective way to gain early market traction and valuable feedback without diluting ownership.

The Rise of Venture Studios

Venture Studios are on the rise, combining the functions of accelerators and VCs but with deeper operational involvement. They are particularly adept at minimizing risk by focusing on startup creation from ideation to exit. This structured approach allows them to produce startups more efficiently, much like a factory produces goods. Venture Studios work with founders from the very beginning, providing resources and support at every stage of development.

The statistics are interesting and of course always depend on the individual situation. Generally speaking, with a venture builder, you can halve your time to Series A funding to just 25.2 months, compared to 56 months in traditional setups. Financially, this translates to an IRR of 53% and tripling your venture’s valuation.

Enhance Ventures created the Startup Studio Map to highlights the proliferation of this model globally. According to the Global Startup Studio Network (GSSN), studios are multiplying rapidly, with over 200 now operating globally. This growth stems from their high success rate compared to traditional startup models.

Venture studios operate across ten key design parameters, as shown by Enhance Ventures . I made a comparison between Axelra AG and Antler to show the 10 design parameter in action:

Here a short explanation what is meant by every of the 10 factors:

1. Focus: Studios either focus on a specific vertical or industry (e.g., fintech) or maintain a broader scope.
2. Ideation: Studios may generate ideas internally or rely on external founders.
3. Corporate Involvement: Some studios focus solely on corporate ventures, while others are independent.
4. Volume: The number of ventures a studio aims to build annually.
5. Guild: The use of shared resources like teams, infrastructure, and services.
6. Funding: Studios provide varying levels of funding, from Sweat only often up to $2 million or more in cash.
7. Time: The average time for a studio to nurture a startup can range from six months to two years. Axelra AG uses in average 105 calendar days.
8. Structure: Many studios combine studio operations with fund management.
9. Control: Studios may maintain high levels of control over the venture during its early stages.
10. Equity: Studios often take significant equity stakes, sometimes as high as 98%

Evolution of Venture Capitalists

Venture capital has evolved over the past three decades into three key phases and in general become more operative and efficient:

1. VC 1.0 (1990-2010): Focused on financing, with institutions and high-net-worth individuals (HNWI) providing capital. Venture capitalists focused primarily on the financial aspects, engaging through cash-for-equity models and preparing companies for IPO or M&A exits.
2. VC 2.0 (2010-2020): This phase saw VCs move towards networking and creating value beyond capital, offering strategic guidance and sector-specific knowledge. The rise of private investors and secondary markets gave VCs new tools for scaling their portfolios.
3. VC 3.0 (2020+): Today's VCs, often referred to as "Operational VCs," are much more hands-on, involving themselves in co-execution and collaboration with startups. This model includes new financial instruments like cryptocurrencies and debt alongside equity.

The Intersection of Operational VCs, Venture Clienting, and Venture Builders

The intersection between operational VCs, venture clienting, and venture studios presents a compelling opportunity, particularly in markets like the U.S., where venture-backed startups often benefit from these hybrid models. Statistics from the Global Startup Studio Network show that U.S.-based studios and operational VCs are more likely to succeed compared to their European counterparts, owing to more abundant capital and operational expertise(.

In Europe and Switzerland, while venture studios, operational VCs, and venture clienting are emerging, they still lag behind the U.S. due to less mature ecosystems and a focus on traditional venture capital. However, with venture building, venture clienting, and co-creation models gaining traction, there is potential for growth, especially in tech hubs that support early-stage startups.

This trend of VCs becoming more operationally involved and corporations adopting venture clienting, alongside VC-backed venture builders, is expected to grow. This makes the startup landscape more dynamic and success-driven across both continents, enhancing both innovation and early-stage validation opportunities for startups.