There are many ways to secure funding for your startup, such as crowdfunding, bootstrapping, business loans, or seeking angel investors.

However, these options typically only give you access to capital.

If you’re looking for hands-on support from startup experts, you may want to consider venture studios instead.
This is a lesser-known option, but it’s a great choice for entrepreneurs seeking more than just funding. Venture studios offer:

🔺 Step-by-step support: Venture studios guide you through each phase of building your startup into a successful business.

🔺 Hands-on resources: They offer mentorship, marketing, and operational help that investors often don’t provide.

🔺 Faster growth: With a ready-made team, venture studios can help accelerate your startup’s launch and entry into the market.

In this article, we take an in-depth look at what a venture studio is and why it could be the right choice for entrepreneurs looking to grow their business creation.

What Is a Venture Studio?

A venture studio, often referred to as a founders factory or venture builder, specializes in creating and developing new startup businesses.

In other words, it’s a business that creates new businesses.

Imagine a business that’s packed with startup teams, including product managers, software engineers, and designers, that are ready to take on your new business ideas.

Entrepreneurs can pitch their ideas to venture studios, and if the studio believes in the potential, they invest resources such as funding, expertise, and hands-on support.

Let’s say you want to create an investment app for parents to start a college fund for their children.
You could go the traditional route: doing your own market research, taking out a business loan, and hiring freelancers to develop the app and design the product.

Many successful businesses have used this approach, but it often comes with challenges that can slow down progress.
For example, imagine hiring a full-stack developer who promises to deliver your app in three months. Since you’re not familiar with software development, delays pile up, and a year later, you’re left with a half-finished product.

Now you have to start from scratch with a new developer, wasting both time and money.

This could be just one of many setbacks, turning what should’ve been a one-year project into a five-year struggle.
Instead of starting with a single idea and building it into a successful business, a venture studio works on building multiple ideas into high growth companies at once.

This approach spreads the risk and increases the chances of success by allowing the studio to test and refine several concepts simultaneously.

As a founder, you benefit from immediate access to experienced developers, realistic timelines, and expert guidance.

Know the Difference: Venture Studio vs. Venture Capitalists

Both venture studios and venture capitalists reduce their investment risk by investing in a portfolio of multiple startups at once.

They anticipate that some of these ideas will fail while others will be exceptionally successful and they focus their time and resources on the latter.

However, there’s a critical difference between the two:

🤝 Venture studios function as co-founders of their portfolio companies, actively participating in developing and managing the business.

💰 Venture capitalists simply act as investors. They remain on the sidelines, providing funding but typically leaving the day-to-day management to the founders.

Most venture studios will partner with very early-stage startups if they believe the business has a good chance of success.

In contrast, a venture capital fund will typically only be invested in later-stage startups that they believe have high growth potential.

At times, venture studios and venture capitalists even work together on specific startup projects or investment rounds.

This happens when venture studios partner with investors, including venture capitalists, to secure additional funding.

This collaboration allows them to use external venture capital while maintaining a hands-on role in developing new businesses.

Different Types Of Venture Studios

Venture studios don’t fall under a single business model. There are three sub-categories of startup studios you should be aware of:

1. Independent venture studios

An independent venture studio generates its ideas internally or partners with very early-stage startups.

It can have outside investors but will make the final decision on which startups to invest in itself.

It will also provide the resources needed to build and launch the startup, including investment capital and a team of experienced entrepreneurs.

Within the independent venture studio model business model, there are two further subtypes:

🔥 Niche studios that focus on building startups within a specific industry, such as only taking on finance startups, in which their studio has a lot of knowledge and expertise.
🔥 Industry-agnostic studios build startups within any industry. This means that they might have a startup in home cooking devices, as well as another in accounting software.

Bill Grossman founded the first independent venture studio, Idealab, in 1996. Its success inspired many others, including MOHARA, which now manages over 20 startup ventures.

2. Tech transfer venture studios

Tech transfer studios work with government agencies, companies, and research institutes to source ideas that can be turned into new companies.

They transfer the intellectual property from the entity that did the initial research to the new companies within their venture studio where it gets built.

For example, imagine a research institute that has developed a groundbreaking technology for renewable energy storage.

Recognising the potential of this innovation, a tech transfer venture studio partners with the institute to secure the rights to the intellectual property.

In this business model, the studio assembles a team of engineers and business experts to refine the technology and develop a viable product.

In real life, FedTech is a Virginia-based tech transfer venture studio focusing on turning federal research and technology into successful businesses.

They work with different government agencies and research organisations to find promising technologies that can be developed into startups.

3. Corporate venture studios

A corporate venture studio functions as an innovation arm for large corporations.

Big corporations can run into the so-called innovator’s dilemma, which happens when they struggle to adopt new technologies or ideas.

This is because they focus on keeping their existing customers satisfied and maintaining profits, making them hesitate to invest in new ideas that might not pay off right away.

Big companies solve this by creating their own venture studios or partnering with corporate venture studios, such as a division within an external marketing firm.

The corporation provides seed funding to the venture studio, as well as broad strategic direction, industry knowledge, and access to distribution channels.

In turn, the venture studio generates ideas and provides the talent and experience needed for successful company building.

This allows the corporation to keep a majority stake in the companies it funds via the venture studio, which it would not be able to do if it invested in established businesses.

At corporate venture studios like Aimforthemoon, they help develop new ideas and support startups that fit their goals, giving them more control over these new ventures.

These business models allow corporations to innovate without disrupting their core operations.

Reasons to Work with a Venture Studio

Besides gaining access to capital and networking opportunities, there are several unique reasons for working with a venture studio.

Here are some of the most notable benefits:

✅ Mitigate startup risk for business ideas

Startups come with a high degree of risk. In fact, it’s a well-known fact that 90% of startups fail before reaching their fifth year.

This often happens because entrepreneurs run with an idea before they confirm that there’s any market demand for their products.

Working with a venture studio can help mitigate this because they do the necessary research and testing to ensure a product-market fit before they start building the business.

Most venture studios are also run by experienced founders who have successfully launched businesses before.
They have extensive experience and they’re knee-deep in the startup world, where they typically create, work with, and launch several startups per year.

They execute repeatable and scalable frameworks to test, validate, build, and grow new businesses.

This is why venture studio startups have less risk and a much higher success rate than self-funded startups, or startups that come out of accelerators or venture capital firms.

✅ Enter a co-founding relationship

One of the downsides of venture capital firms is that they only invest in startups, so their only loss—should a startup fail—is financial, and those losses are built into their financial models.

Venture studios do not only provide or organise financial investment to a startup; they are co-founders in the startups they work with, sharing all the pain and joy of the business.

This means that even though they work on multiple startups at once, they are equally invested in the success of each one.

They invest time and resources in a startup by providing a team to work on building the business and taking care of day-to-day operations.

✅ Access world-class expertise

Startup studios offer experienced teams with diverse skill sets that can support all aspects of building and scaling a startup.

They can help with research, testing, product development, design, marketing, management, sales, and everything else a business needs.

This is an incredible advantage over working with the limited teams that most startups typically have access to during their early stages.

✅ Solve big business problems

Having worked on multiple startups, the team at a venture studio will likely have worked through most of the challenges your business will face.

This means that you have access to ready-made and tested solutions to any problems you might encounter during your startup journey.

For example, if you’re setting up your business solo, you may get stuck on a feature that you’re unsure how to implement.

In this case, the startup studio can provide guidance or even connect you with developers who have successfully built similar features, helping you move forward.

✅ Expand your network

Kicking off your own startup can be daunting because you don’t know who to turn to for help, where to find partnerships, or how to build a supportive network.

By using a venture studio, you can connect with other entrepreneurs and industry experts, opening doors to new opportunities and collaborations.

For example, if you’re starting a business in the real estate industry, they may introduce you to seasoned investors, potential clients, or technology partners.

These connections can help you improve your offering and accelerate your growth.

Should You Work With a Venture Builder?

To know whether working with a venture studio would be a good fit for you, it’s helpful to first understand when you shouldn’t work with one.

If the following applies to you, a venture studio might not be right for you:

⛔ Your startup has already reached the growth stage.
⛔ You are unwilling to give up a relatively high share of equity ownership in your business.
⛔ You don’t want to enter into a long-term co-founder relationship.

However, if you’re an entrepreneur without an idea for a business, but you are interested in becoming a founder of a startup, then a venture studio is the perfect fit.

Most venture studios will partner with entrepreneurs to build out businesses based on the venture studio’s internally generated ideas.

Alternatively, if you’re an early-stage startup with a great idea but need a partner to help you build out, then working with a startup studio is also one of the best options available.

Choose The Right Venture Studio

At MOHARA, our innovative sweat equity model sets us apart.

Unlike other venture studios, we take an equity stake in exchange for providing our skills and expertise.

This means that we’re invested in your business’s success because we only make a profit if your startup works.

We provide our expertise at a small cost, giving you access to some of the world’s best startup creators for a fraction of the price you’d pay anywhere else.

We have over ten years of experience developing software solutions and a team of more than 75 product managers and engineers who have built thousands of products.

We can function as your tech co-founder and handle all responsibility for developing a winning product, from ideation to execution.

If you’re an early-stage startup with a great idea, get in touch with us today.