Numbers of startup studios. Excitement and criticism of venture studios: "There was $5M here just a moment ago. Where did it go?”

To show some notable studios and their investments in the picture below, I took the original table of Enhance Ventures and updated the data: a $320M deal in May 2023 at Atomic and a $200M deal at Expa in 2022. Added Juxtapose with $500M AUM and High Alpha with $260M across their funds and studios. It illustrates that studios can raise hundreds of millions from many VCs, including Marc Andreessen (Atomic), Peter Thiel (Atomic), Jeff Bezos (PSL), and Richard Branson (Expa, founded by Garrett Camp, the co-founder of Uber). Science launched its Rolling Fund on AngelList. This list is incomplete and misses some studios due to a lack of open data.

Incubators and accelerators receive 5-10% equity. They work simultaneously with 20, 50, or even 100+ startups. The last Y Combinator batch, for example, included 210+ startups. With such a workload, providing hands-on involvement in each startup is impossible. Startup studios usually launch 3-5 new startups annually; mature studios can aim for 10+ new ventures every year.

The studio team engages far more deeply with startups than accelerators regarding employee time, resources, and responsibility. Every startup receives support from a studio team equivalent to 2-5 full-time employees during the active studio involvement period. For this reason, as full-fledged co-founders at the outset, venture studios typically hold a stake of 20-40%, sometimes more, rarely less.

Some venture builders may take as much as 80% of a startup, especially when they don't need to attract external investment and are prepared to invest up to the exit, as might be the case with corporate studios. A studio's major (50-90%) equity stake makes it very challenging to attract external investments and strong co-founders with a business owner's mentality.

Matthew Burris, a partner at Venture Studio Associates, states 4 roles of studios: founder (validating ideas and then bringing a co-founder or CEO to a startup), co-founder (starting together with entrepreneurs), late co-founder (joins a startup team with initial traction), re-founder (acquires a startup or technology and relaunches a company). For the founder and co-founder roles, the ideation process must be established inside a studio.

A founder of a startup studio, whom I interviewed, shared that out of 30-40 hypotheses, 3-4 companies are formed. Coming up with new ideas is not a bottleneck in a studio. Founders and studio teams do it efficiently. The list of ideas of the venture studio Atomic increased from 600 in 2021 to 1000+ ideas in 2023.

Copycat? Rocket Internet, famous and criticized for its copycat strategy, was able to build huge companies, some even with a higher valuation than the original ones. But the copycat strategy may not be an excellent long-term strategy. As Jack Abraham comments, this approach attracts different kinds of people: more mercenaries than mission-driven.

AI. Soon, we might see high-quality AI tools for generating startup ideas (better if they were based on real problems). I used GPT-4 a couple of times to generate startup ideas (in unfamiliar areas) and then discussed them with guests in interviews – I didn't get anything valuable. As one of my guests said, “ChatGPT is much better at poetry than at generating new ideas.” :grin:

Co-founders can realize greater earnings or capital gains from exits. Entrepreneurs join a startup studio to gain a fully-fledged co-founder equipped with expertise, financial resources, marketing, and refined processes for validating ideas, creating MVPs, and bringing a product to the market. This increases the likelihood of success and accelerates startup traction, leading to the aforementioned benefits.


Purpose Built Venture Studio built a financial model to help entrepreneurs answer, “Will you make more money with a studio or without?”

“With an assumed 3 percentage points increase in the chance of success, a founder working with a studio that might allow you to skip half a round of dilution ends up with a 44% better financial outcome than founding without a studio.” You can play with figures here and get different results.

The model and assumptions can vary, but the ultimate value of a studio for entrepreneurs is getting more money with a greater likelihood of success.

Studio as a partner. Entrepreneurs don't have to risk all their capital venturing into the unknown; they can share risks with partners, increasing the odds of success. Companies with three or four co-founders become unicorns 78% more often, while those with a single founder are 38% less likely. As such, a studio makes for a strong partner choice.

Granting a significant company share to a studio creates a similar dilemma for entrepreneurs between starting alone or with co-founders.

I'd consider the prospect of joining a studio from the perspective of what would enhance the chances of success – one or several co-founders or a studio with its advantages. Matthew Burris demonstrates that a founder can have 4% more nominal equity (which is 23% more in relative terms) after a Series A round if they choose to partner with a studio instead of an individual co-founder.

Contrary to what one might assume, it's not only novice entrepreneurs who gravitate toward startup studios. From the resources above and my conversations with startup studios, they primarily seek (and do it successfully) experienced founders.

The categories of potential co-founders for startups in studios, viewed from the perspective of startup studios, are:

Attracting exited entrepreneurs to startup studios can be tough, given they see less value in studios with many VCs eager to support them. However, the research indicates that although top-tier VC firms generally enhance the likelihood of success, a company founded by a proven entrepreneur doesn't necessarily benefit more from funding by a top-tier VC than from any other source. This allows startup studios to showcase their worth to experienced founders. How to engage them? I'll discuss this in sections 15-16 while sharing my vision for new studios.

James Moran, a co-founder of YipitData, investor, and author of Venture Studio Index, shares that, according to their data, CEOs of the most successful venture studio startups tend to be:

1. Prior founders who are looking to build again and
2. VPs of major groups at a medium to large tech company.

Ideal Co-founder Profile. The CEO of High Alpha Innovation, Elliott Parker, shared that they’re principally interested in two things: “1) the ability to build and manage a team, and 2) the ability to persuade investors, partners, employees, and customers to get on board and support the company. Can a founder candidate build a team, lead it, and tell a good story?”

From one studio, I heard a straightforward answer they try to get while evaluating an EIR candidate: “Is the founder fundable?” Another studio shared their only question to a co-founder during an interview: “What was the most significant hack you've implemented in a company?” Entrepreneurs must be adroit in identifying unconventional solutions to uncover significant opportunities.

Regarding roles, studios mainly seek a CEO; a CTO is also frequently targeted. If we consider the studio as a hipster within the hipster, hustler, and hacker model – all roles will be addressed.


In the interview for the Startup Studio Manifesto book, Elliott Parket described, “When we start hypothesizing to create a startup, there are three roles we need to fill. We have to find someone to make decisions for the business, someone to be responsible for the product, and someone to take charge of customer experience. Sometimes these three roles might be filled by just one person, and other times we need three or more. Generally, we strive to launch companies with at least two co-founders.”

When a venture builder achieves success, finding entrepreneurs becomes easier. The startup studio eFounders, after five years of operation, received 1800 resumes per year but still aimed to build its own "employer" brand to draw more top-tier candidates from whom the best could be selected.

Let's briefly examine the different structures of startup studios. For a detailed overview of startup studio structures, advantages, and disadvantages, refer to the article Understanding Startup Studio Structures by John Carbrey, the founder and Managing Director of FutureSight, and the Vault Fund's white paper.

The holding and dual-entity models are the most common for forming startup studios. It might be easier to start with a holding company and, after proving the studio-market fit, shift to the dual-entity model, as I'll suggest in section 16. Setting up a fund near a studio can cost $30-200K in legal fees, so the size of a fund has to justify the expenses. Allocating $100K for legal expenses from a fund starting at $10M+ can be a reasonable choice.

Other variations, like adding an angel syndicate (club deals) for subsequent rounds through SPVs to keep voting power and monetize pro-rata rights via carried interest, are described in the articles Sidecar funds, corporate vehicles, club deals by Quentin Nickmans, a founder of eFounders (Hexa), and Understanding Startup Studio Structures by John Carbrey.

However, Polina Flink, the managing director of venture builder Digital Native, shared that partnering with corporations when creating startups can result in conflicts of interest: 1) a corporation might want a startup to cater specifically to its needs, whereas a venture builder creates products for a broader market; 2) a venture builder aims to increase the valuation of the startups it creates, whereas a corporation may want to acquire the startup at a lower price.

I surveyed US angel investors on LinkedIn about their attitude to investing in startup studios and received 30 responses to the following questions:

When formulating a venture studio's thesis, there are two options:

With a narrow focus, the emphasis is on an in-depth understanding of the industry, duplicating the business model or approach, and leveraging a rich network and other resources that can be utilized across multiple projects.

Portfolio companies operating within a single industry can share insights, partnerships, and ideas. The downside of a very narrow focus is that, in some cases, there might not be a lot of opportunities for unicorns. Also, if the industry is subject to economic fluctuations, all studio projects will be impacted (or Web3 startups might have to pivot into AI startups :joy: which is not a bad scenario). There's also a temptation to broaden the studio's focus when interesting ideas in related areas emerge.


Agnostic studios have broader idea selection and adaptability, leading to a varied startup portfolio and less industry-specific economic reliance. However, this diversification increases costs due to varying expertise needs and (in my opinion) negates the startup studio effect making it harder to attract co-founders and investors. I’ll share more thoughts in section 15.

You can't definitively conclude “I should start a startup studio” just by reading this research. Similar to any extraordinary startup, a startup studio must have unfair advantages, for example:

The approach I’ll outline implies starting a studio without huge capital or a well-known brand. Both of these usually offer significant advantages in attracting talent and the ability to be agnostic for pursuing major trends, where decacorns might emerge. Atomic, with $750M funding across their four funds, and Sutter Hill Ventures, which originated 20 companies – 8 worth more than $1B, including 2 decacorns ($10B+), successfully exemplify a different approach than mine.


The biggest problem of studios. Naval Ravikant, whom I deeply respect and admire, criticized the venture studio model because you cannot recruit the best entrepreneurs (the scarcest resource), taking a significant (40%) equity for providing an idea, office space, operations, and a fairly small amount of capital. I agree – an average studio, even with a co-founder level of support, will attract average founders. Though it may still be viable in some cases, we strive to boost the chances of
creating new unicorns (and save them from extinction, especially given the 93% decline in their new offspring :grin:).


What conditions are necessary to attract first-tier founders, aside from taking a lower (20-30%) equity stake? If there is the best-performing team with extraordinary expertise in a niche – every founder considering launching a startup in that field will gravitate toward this attraction center (studio), creating even more gravitation for future founders, investors, and experts.

You’re right; the same network effects (thanks, NFX for the amazing course & bible) work inside a startup studio – the concentration of niche expertise will attract more expertise. Or, to put it in Naval Ravikant's terms, compound interest is attributed to both the studio's experience and its knack for creating unicorns.

NNLL approach: Niche focus, Niche team, Lean startups, Lean studio. What was surprising to me – several days after formulating this vision, I checked my old post where GPT-4 gave pretty similar advice for building a unicorn startup studio, including 1) focus, 2) strong VC/co-founders network, and 3) cost efficiency. It also speculatively counted my chances of 25-30% to build a unicorn startup studio (it just didn’t know about this research and massive interest in it :grin:).

You can easily attract top-tier founders if your studio shows an extraordinary track record and expertise in a specific niche. How to get there? Step by step, diminishing the risks for you and your investors.

I propose a 4-stage track for studios:

What if a startup studio’s traction is slow, or you can’t reach the goals of each stage? As with startups – pivot, reduce burn rate, raise a bridge round (didn’t want to write this, but the last option is “close” :grin:).

LEAN stage-gate model for startup studios: Launch, Execute, Advance, iNdependence.

6-7 years is needed for a startup studio to reach maturity and become self-sufficient.

In the two previous sections, I outlined my vision for the NNLL startup studios (niche focus, niche team, lean startups, lean studio) and suggested the LEAN stage-gate model for launching & funding studios.

For the first stage (Launch), I plan to create an incubator to help new startup studios solve the cold start problem. For the second stage (Execute), I will create a fund to back studios.


Call to action 1: Looking for a partner to create a VC fund for studios – DM or email me a few words about you and your experience. I aim to collaborate with someone who has dedicated 10K+ hours to raising funds from LPs and managing VC funds. Preferably the US (I plan to move there in a couple of years), but the UK and EU are also interesting; though, I'm open to partnering with other geographies as well – Asia, Latam, MENA, etc. (open to positive black swans :grin:).

Call to action 2: Looking for aspiring & emerging studio founders – fill out a 2-minute form to join a waitlist if you want to launch a startup studio, find co-founders (partners) to launch a studio together, or solve the cold start problem during the initial studio stage. I’ll be happy to help you personally or through my future incubator & fund for startup studios. I have several great entrepreneurs aiming to launch a startup studio and currently seeking partners (I can be your matchmaker :grin:). Update: just join The Venture Studio Family – a paid community where studios share their numbers, documents, & investors.

Call to action 3: Looking for experienced studio founders for a podcast / inviting you as an adviser as part of the incubator / and some secret thing – DM or email me. Update: and join The Venture Studio Family – a paid community where studios share their numbers, documents, & investors.

Call to action 4: Looking for sponsors for the next research – DM or email me if you might be interested. Next year, I plan to organize an analytical team to create a much more professional study (with fewer emojis :grin:). During these 7 months, I encountered a lot of opportunities to gather more precise statistics on studios’ performance and, with more confidence, answer the question, “Are studio startups more successful than non-studio ones? If so, by how much?”

Call to action 5: Want to translate this research into your language to find partners, launch a studio, or just spread insights in a local community? DM or email me, and I’ll be happy to collaborate.

Wow! I’ve just finished it. It’s incredible :speaker:!

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