How about support, business advice, mentorship, or collaboration? The solution a startup can come to is somewhere in the middle between business consultancy and venture funding – venture studios. This is a transformative model designed to rewrite the rules of entrepreneurship. Let’s dive deep into the topic and figure out how venture studios are reshaping the startup ecosystem.

What are venture studios?

Venture studios are unique organisations that conceptualise, build, and launch startups from scratch. One such studio can become a birthplace for many companies by addressing critical inefficiencies and multiplying innovation.

Unlike accelerators and incubators that support external startups, venture studios act as co-creators, providing everything from business ideas to operational teams. Venture studios work as co-founders of their portfolio companies, participating in, developing, and managing the business. On the other hand, venture capitalists merely act as investors who remain on the side, providing funding.

In venture studios, an in-house team of seasoned professionals helps the founder build the startup by vetting ideas and considering their experience in product development, marketing, and scaling businesses.

The challenges in the current startup ecosystem

Some challenges in the current startup ecosystem allowed venture studios to emerge as a phenomenon. In addition to the traditional issues any business faces at the beginning, like a lack of resources, limited networks, and high levels of uncertainty, the funding system itself isn’t very welcoming.

Conventional funding models, in which venture capitalists back early-stage startups, often push founders to achieve rapid success. This urgency can result in burnout or rushed decisions that may not be in the company's best interest. Naturally, investors want to see the startups they support thrive and, ideally, generate substantial returns on their investment.

The result is important, but that practice might not help founders feel safe and seen. Without proper guidance, many struggle to validate their ideas or secure funding. Venture studios step in to bridge these gaps, offering a holistic model that provides more support for startups at every stage of their journey.

How to solve startup challenges?

Venture studios propose various ways to address and solve the aforementioned challenges for startups. It all starts with idea validation, where the studios' seasoned professionals evaluate the idea and determine whether it’s viable. Thorough market research and validation processes minimise the risk of investing in untested concepts.

Operational support ensures that the founder is on the right track. Studios provide startups with pre-assembled teams of experts in product development, design, marketing, and legal affairs. Founders don’t have to worry about building everything from scratch and focus on leading their vision.

Risk reduction is all about providing a safety net that allows entrepreneurs to experiment and grow without the fear of immediate failure. Venture studios reduce the financial and operational risks for founders by sharing equity and resources.

The final way to help is funding access. Yes, this part doesn’t differ much from every other investment option. Oh, but it does. The team in the venture studios is much more interested in whether your idea wins or loses, and their funds ensure founders can focus on execution rather than endless fundraising rounds.

Why venture studios are the future

We believe venture studios are the future of startup support systems. This model is uniquely positioned to capitalise on market trends and address emerging challenges, as it emphasises analysing the market beforehand and creating players for it. The need for innovation at scale is greater than ever, with businesses striving to adapt to disruptive technologies like AI and blockchain.

Additionally, venture studios are democratising entrepreneurship. Now, non-traditional founders with ‘insane’ ideas can secure funding and get the operational support they need to bring their ideas to life. Sustainability is another area where venture studios shine. By focusing on large-scale problems such as climate change or resource efficiency, studios can align business success with meaningful social impact.

Success stories of VS

There are a couple of success stories of venture studios that have grown bright companies that are now leaders in their markets:

• Atomic: since 2012, Atomic has been building and launching startups from the ground up. They’ve created over 20 successful companies, including Hims & Hers, Bungalow, and Terminal
• Expa: Expa is a global venture studio that helps turn great ideas into successful companies. It has shaped companies like Uber and Twitter, offering expert mentorship, strategic advice, and connections to top industry leaders
• Betaworks: based in New York, Betaworks focuses on startups that blend media, technology, and culture. They’ve backed some big names like Tumblr, Giphy, and Anchor, providing early funding, product development support, and mentorship to help founders bring their ideas to life

At SEAL Group, we represent a venture studio model ourselves. Based in Lithuania, we invest in local startups from different industries. We operate in over 25 business areas across six countries, including mobility, automotive, e-commerce, and more. Each of these businesses boasts a proven track record, and SEAL’s support acts as a catalyst, propelling them to new heights.

Criticism and limitations

This model, of course, has its downsides. Some argue that venture studios can limit founders’ autonomy due to their heavy involvement in decision-making. Others worry that the studio’s focus on efficiency might stifle creativity, leading to homogenised ideas. However, despite these concerns, venture studios remain a powerful tool for launching and scaling startups, providing invaluable resources and structured support.

This model is now reshaping the startup ecosystem by offering a more reliable and supportive pathway for entrepreneurship. This approach helps founders feel more secure in their ideas, march on with the firm support of experienced professionals, and be as creative as possible without the constant pressure of making money.

By addressing the inefficiencies of traditional models, they lower barriers for founders and enable the creation of high-impact startups. As technology evolves and global challenges demand innovative solutions, venture studios are well-equipped to lead the way.

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.