Is a Venture Studio Right For You (and Your Startup)?

Decision fatigue is real — for all of us, but especially for startup founders.

You have so many choices to make on a daily basis when launching a company. Some are small reversible decisions but others are big and hard to undo.

Whether to bootstrap, go the VC route, join an accelerator, or partner with a Venture Studio is one of those big messy decisions you need to get right.

In this article, I’ll break down the differences between each startup catalyst model and help you determine which path fits best with where you’re at now and what you want in the future.

What Do You Need?

This is the most important consideration when choosing between going it alone, taking Venture Capital, joining an accelerator, or partnering with a Studio.

Though they will all likely tell you that they do all the things, in reality, each model has a specific and unique value prop.

?Time

If you need time to work on your startup — if you don’t have the idea fully fleshed out or aren’t sure if you’re ready to be all in, you should go it alone.

The truth is, any of these startup support models want you to be serious and 100% committed to your venture and they aren’t going to work with you if you’re not.

There’s no problem with needing more time, it’s actually a good thing to be self-aware in that sense. No two startup journies are the same — take your time get yourself ready before trying to partner with an outside firm.

??Money

If you simply need money, you should go with a Venture Capital firm.

Venture Capital firms fund startups as early as MVP with traction (typically these are Pre-seed VC funds) and as late as it gets (Series-C and beyond).

If you don’t have a product built yet, it’s unlikely you’ll get funded — even by a Pre-seed firm. If you do have a product and a level of traction that demonstrates clear demand, you’re in a good position to pitch early-stage VC firms.

Be aware though, all VC firms are betting on your ability to lead the company to a serious exit — they’re hoping for a unicorn — so if you don’t think you can deliver that or don’t want to run a company to that level, you should reconsider Venture Capital money altogether.

Connections

If you need connections — to investors, potential customers, and/ or other founders — an accelerator might be best for you.

Accelerator programs are good for education but what they’re really great at is bringing people together. They focus on uniting key stakeholders from across the startup ecosystem. They’ll be able to connect you with partners who can provide discounted services, past alumni who have been in your shoes, an entire cohort of founders you can lean on for support, advisors who will help you think through some decisions, and investors who attend the demo days.

Accelerators are a great option for small founding teams who have a product and some level of validation who really need to pour fuel on the fire and ramp up what’s already working.

If you’re a solo operator with an idea, you’re unlikely to be a good fit for an accelerator. Though they all claim to have no bias against solo founders, most of them do. It’s very hard launching and running a successful company on your own and they see that as a risky bet.

Accelerators will provide you with some funding (usually) but they’ll take a 5–10% equity stake in your company in exchange for that. The additional downside is that they really don’t help in a hands-on way. They will provide some advisory — typically in an open office hours setting — but there are too many teams in one cohort to get involved in any significant way.

Co-founder

If you need a hands-on partner that will develop a very early-stage concept into a fully launched and funded startup — a Studio is likely a good fit.

Unlike Accelerators, Studios prefer single operators. They want you to bring domain expertise, a promising opportunity, and resourcefulness.

In return, they offer core team members, funding, and a variety of support resources including innovation playbooks, connections to industry players, high-value tools (think access to Crunchbase and SEMRush), pre-made software, customer lists, partner lists, access to agencies that specialize in domains like marketing, branding, finance, development, and more.

Most founders find the hands-on support of the core Studio team to be the most compelling value-add.

None of the other models put their team to work on your venture in this way. It’s typical for Studios to allocate 1–2 members of their team to work with you on research, validation, product development, and go-to-market. In addition, Studios often offer accounting, legal, and HR/ back office personnel to help with specific needs when they arise.

If you’re looking for a true investing co-founder, a Startup Studio is the right model for you. But, be aware that the Studio will expect co-founder-level equity and have a significant influence on the direction of the company and the decisions you make as the founder.

While Studios typically do fund the startup build, only a handful offer a salary to entrepreneurs working on their ventures. Instead, Studios typically offer EIRs a stipend based on mutually agreed-on milestones.

On that note, though, Studios do help with fundraising in a significant way. From access to investors within their network to helping with the pitch deck and presentation, you can expect a Studio to be as hands-on in the fundraising process as a co-founder would be.

There Is No *Right* Answer

The path you decide to pursue is really dependent on what you need from a partner.

• If you simply need money, go with a VC firm.
• If you simply need connections, go with an Accelerator.
• If you need co-founder level support, go with a Startup Studio.
• If you’re not sure what you need, or if you need more time, bootstrap it until you’re ready to work with a partner.

Other factors that will influence this decision include your startup’s traction, your team size, your ultimate exit goal, and your own personal preferences. Be sure to weigh all the relevant factors — but know that you have options.

If you’re curious to learn more about Venture Studios,?follow me on Twitter?or?connect with me on LinkedIn.

If you’re considering launching a Studio, take a look at the course I’m teaching in partnership with Maven:?Studio Launch School.