What Is Venture Building? Inside the Startup Studio Model

The startup scene is a high-stakes casino where everyone's betting on black, hoping for a unicorn, but mostly landing on… not-a-unicorn. In this world, venture building is a croupier, attempting to stack the odds a bit more in favor of the house, a house that builds multiple startups. It’s an almost maniacal yet surprisingly methodical approach to company creation. Instead of isolated sparks of genius (or madness), this approach is a dedicated forge, systematically hammering out new ventures. 

Below you’ll find everything about this shift in how you can innovate and launch businesses, and its global ascent, which is hard to ignore (about two-thirds of CEOs expect to build new ventures in the coming year).

What Is Venture Building?

In venture building, you have an entire organization, a studio if you will, dedicated to dreaming up, testing, and launching a whole portfolio of startups instead of going solo. These settings go beyond funding an existing idea because such builders are often the source of the idea, too, or they co-create it with founders they bring into their fold. 

The key concept is parallel entrepreneurship. A venture builder isn't building one company, but churning out multiple, potentially successful ventures by taking advantage of shared resources, a repeatable process, and a core team.

The origins of the concept are a bit murky, like any good backstory. Some point to Bill Gross's Idealab in 1996 as one of the earliest and most prominent examples. Idealab was investing, actively incubating, and launching its own internet companies, one after another. From this soup, more refined venture-building models evolved. 

Before the startup studio became a trendy term, people were already figuring out that a team approach to innovation, with centralized resources, could de-risk the terrifyingly risky business of starting something new.

How Does a Venture Builder Work?

The startup-birthing factory operates with less chaos and more choreographed moves. The heart of a venture building throbs with its in-house teams and shared resources:

• UX/UI designers build a prototype
• Marketing experts know how to make noise
• Legal people navigate the paperwork
• Techs create robust platforms

These are not freelancers but full-time employees of the studio, and their expertise spans multiple ventures simultaneously. The shared infrastructure is a massive cost-saver and efficiency-booster for the fledgling startups under the studio's wing, as there’s no need for hunting for a good CTO or a reliable designer for months on end.

The centralized ideation and validation process is also the reason why the model’s so successful. This is not a throw-spaghetti-at-the-wall-and-see-what-sticks kind of operation. Maybe a little, but it's scientific spaghetti cooked in several steps:

1. Ideation

Ideas bubble up from anywhere: the studio's internal team, market research identifying juicy gaps, or external entrepreneurs pitching a nascent concept. The studio actively brainstorms, researches trends, and looks for problems aching for a solution. The stage can take anywhere from 2 to 5 months to come up with something solid and explore this opportunity.

2. Validation

Before a single line of serious code is written or a big marketing budget is blown, the builder puts ideas through a brutal validation phase. It usually means rapid prototyping, customer interviews, landing page tests, A/B testing headlines until their eyes bleed. The goal is to kill bad ideas quick and cheap. It’s good to allocate from 3 to 6 months for this phase.

At the end of the day, 42% of startups fail because there’s no need for what they’ve built, which means they basically skip the validation stage.

3. Product (MVP)

Once an idea shows promise, the studio's team builds a minimum viable product, or MVP, in about 12 to 18 months. Some MVPs can be built much faster, since solutions vary in complexity, stack, and other parameters. The aim of the phase is to get something functional into users' hands to gather real-world feedback.

4. Growth

With an MVP and initial traction, the focus shifts to scaling for the next 12-18 months. The shared marketing and growth hacking teams deploy their playbooks and iterate to find product-market fit and acquire users or customers.

Then, once a venture has legs, a dedicated founding team (one or more people from the studio or recruited), and perhaps its own initial external funding, it's "spun out" as an independent company. The builder often retains a significant equity stake.

Such a systematic and repeatable process is ideal for pumping out startups with a higher likelihood of not face-planting straight out of the gate.

Venture Builder vs Incubator vs Accelerator

Isn't this just a fancy incubator or accelerator?

They all hang out in the same entrepreneurial playground, but playing different games with different goals, support levels, funding schemes, and more.

So:

• Incubators are greenhouses for tiny idea-seedlings. They provide a safe space and some basic nutrients.
• Accelerators take existing young businesses and get them into shape for rapid growth and investor readiness in a cohort-based program.
• Venture builders are in the business of creating the baby from DNA upwards, then raising it until it can walk on its own.

The Venture Builder Model

The venture building model is a concoction of specific ingredients and roles stirred together with a unique financial recipe. These are the pillars holding up the entire edifice:

1. The core team. We're talking about seasoned operators: product managers who’ve launched things before, engineers who can build scalable systems, marketers who know growth hacks, designers with an eye for conversion, and financial experts. They are the permanent staff of the studio.
2. The process. As we saw, there's a method to the madness. A refined and repeatable process for ideation, validation, building, and scaling. It’s constantly improved with learnings from each new venture.
3. Capital. It can come from the studio's own partners, a dedicated fund they've raised, or corporate backers. The capital fuels the early stages of their portfolio companies before they seek external investment.
4. Network. Investors, industry experts, potential customers, and talent are pure gold. If you have one, you’ll accelerate everything from fundraising for spin-outs to finding the first crucial clients.

Key roles you'll find in the scene:

• Studio CEO/Managing Partners are the visionaries, fundraisers, and decision-makers for the studio itself.
• Entrepreneurs-in-Residence (EIRs) are experienced founders or operators who join the studio. They find their next big idea or lead one of the studio's validated concepts.
• Functional Leads/Specialists, like heads of product, tech, marketing, design, etc., who oversee their respective domains across all portfolio ventures.

The revenue model and equity structure:

• Management fees (less common for pure VBs). If the studio manages an external fund, it might take a management fee, similar to a VC.
• Equity in spin-outs. When a venture is spun out, the venture builder retains a big equity stake. This is their main long-term financial incentive. If a spin-out becomes a unicorn, the studio (and its investors) win big: anywhere from an initial 25% to even 70% equity, which gets diluted as the startup raises further rounds.
• Service fees (sometimes). Some studios might charge their portfolio companies (or corporate partners) for the services rendered, though this is often bundled into the equity arrangement.
• Dividends/profit sharing. If portfolio companies become profitable and issue dividends, the studio gets its cut.

Investor and founder incentives are cunningly aligned. Investors (in the studio itself) get a diversified portfolio of de-risked startups. Instead of betting on one horse, they're betting on a system designed to produce multiple winners, as studios see a 30% higher success rate for their startups compared to traditional startups. Some estimates even say that ventures from studios have an internal rate of return (IRR) up to 53%, compared to the VC average of around 21%.

And founders (joining a studio venture) get to jump into a pre-validated idea with a support system, initial funding, and a team already in place. Sure, they might get less equity than if they started solo from scratch, but their chances of success and the speed to market are theoretically much higher. It's a trade-off: less equity for a potentially much bigger pie and an easier ride.

Benefits of the Venture Building Model

The venture building model brings serious firepower to the startup creation. It’s not a silver bullet, but it's a good cannon. First off, let's talk about the increased startup success rate. For traditional startups, figures vary, but it's often cited that up to 90% fail. Startup builders aim to flip that script by: 

• Rigorously validating ideas
• Providing expert operational support
• Ensuring a strong founding team

Startup Genome has indicated that solo founders take significantly longer (x3.6 times) to scale and are less likely to achieve high growth than teams. And startup builders institutionalize the strong team aspect from day one.

Since startups are more likely to succeed, this means they’re more likely to reach a faster time-to-market. Let’s say you got an idea on Monday. As a traditional founder, you might spend months finding a co-founder, figuring out tech, and scraping together funds. As a builder, it can take you an idea from concept to MVP in a ludicrously short timeframe because the resources (people, playbooks, initial cash) are already there. Some studios aim for an MVP within 3-6 months and give a massive competitive advantage.

And don't forget the experienced founding teams. Startup builders recruit seasoned entrepreneurs or pair industry experts with their internally developed concepts. They might also bring in Entrepreneurs in Residence (EIRs) who are looking for their next venture. So, their startups are often led by people who’ve "been there, done that". The studio’s core team also acts as a collective co-founder, bringing a wealth of experience that a first-time solo founder simply wouldn't possess.

Examples of Successful Venture Builders

Alright, theory is great, but who's actually making it in the venture building arena? There are some titans, and their success stories paint a vivid picture.

Rocket Internet (Germany)

Perhaps one of the most notorious and, undeniably, impactful early players. Rocket Internet was the clone kings for a while, taking successful US business models (like Zappos or Amazon) and launching localized versions in Europe, South America, and Asia (like Zalando, Lazada, or Jumia). Their execution was relentless and brutally efficient. 

While sometimes controversial, their ability to scale fast demonstrated the raw power of a centralized and well-funded building platform. They went public in 2014, and many of their ventures became multi-billion-dollar companies. What made them tick were three things:

• Unmatched speed
• Operational excellence in execution
• Aggressive expansion

Founders Factory (UK)

These guys have a fascinating twist. Founders Factory partners with large corporations (like L'Oréal, Aviva, and EasyJet) to build startups that align with the corporations' strategic interests, alongside building their own from-scratch ventures. Thus, their startups get incredible unfair advantages: industry insights, distribution channels, and potential instant pilot customers. 

They give capital, a crack team of operators, and access to their corporate network. Their success hinges on this symbiotic relationship between agile startups and established industry giants, plus a strong in-house operational team.

Antler (Global)

Antler has a unique approach as it focuses on the very, very beginning: the individual. They recruit talented and ambitious individuals before they have an idea or a team. Then, through an intensive program, Antler helps them find co-founders from within the cohort, develop and validate an idea, and then invests. They are a "company builder" that starts with people. 

Antler’s global footprint and focus on talent aggregation are key to their model. They're betting on exceptional people, giving them the framework to create impactful companies. So far, they've helped launch hundreds of companies globally.

eFounders (France/Belgium)

eFounders has a stellar track record, building companies like Front, Aircall, and Spendesk in the SaaS market. They ideate internally, recruit a CEO/co-founder from outside, and then build the product together. Their deep focus on one sector allows them to reuse knowledge, code, and strategies very effectively.

Once again, what makes these diverse studios successful?

1. They aren't reinventing the wheel every time.
2. They attract top-tier founders and operational talent.
3. Access to capital, customers, and expertise.
4. Killing bad ideas quickly, doubling down on winners.
5. They don't advise; they do.

Is Venture Building Right for You?

So, the million-dollar question (or maybe multi-million, if things go well): Is stepping into the world of venture building your golden ticket? 

It depends on who "you" are.

For Founders (or aspiring ones) 

Are you an ideas person who loves the thrill of 0 to 1, but gets bogged down by HR, legal, or finding the perfect CTO? Do you crave a support system and a bit of a safety net? 

If so, venture building could be your jam. You get to focus on building the product and the business, with a team of experts handling the operational scope. You'll likely give up more equity upfront than going it alone, but the argument is you're getting a smaller slice of a potentially much bigger, faster-growing, and more de-risked pie. 

However, if you're a fiercely independent visionary who wants total control, can't stand anyone else's hands on your "baby," and wants to own 100% of your idea (at least initially), then the venture building model might feel constricting, because it’s a trade-off between autonomy and support.

For Investors

If you’re tired of sifting through thousands of pitch decks from unproven teams with untested ideas, venture building is a more de-risked investment opportunity. You won’t be betting on one startup but will be relying on a system designed to produce multiple successful startups. The diversification is built-in. The studio's experienced team is an initial filter and co-builder, increasing the quality and resilience of the ventures that emerge. 

So, you can expect to see more B2B or sensible ideas rather than wild moonshots, though this varies. The potential for higher success rates and faster exits is very attractive (on average, studio-built startups have a higher exit rate).

For Corporations

And if you’re feeling the heat from nimble startups disrupting your industry or your internal R&D is moving at a glacial pace, partnering with or creating your own venture-building initiative is a powerful way to inject innovation, explore new markets, develop new technologies, and attract entrepreneurial talent. Founders Factory is, again, a prime example of this corporate collaboration model. It allows corporations to experiment with new business models at arm's length, without disrupting their core operations.

FAQs

What is the difference between a startup studio and a venture builder? 

Not a whole lot these days. The terms are often used interchangeably, like chips and fries, depending on which side of the Atlantic you're on. Startup studio tends to emphasize the creative, from-scratch aspect, and venture builder might sound a tad more corporate or financially focused. 

However, their core function (systematically building multiple ventures with shared resources) is pretty much the same. Some might argue venture building has a slightly broader scope, perhaps including later-stage involvement, but in common parlance, they're peas in a pod.

Do venture builders fund startups?

It’s a core component. They typically give the initial pre-seed or seed capital to get their ventures off the ground. This isn't cash only, but also sweat equity in the form of the studio's team, resources, and office space. Once a venture is spun out and proves its mettle, it will then go on to raise further rounds from external VCs and angel investors.

How do you join a venture builder as a founder? 

There are a few paths into this fascinating ecosystem. Many studios have EIR (Entrepreneur-in-Residence) programs where experienced entrepreneurs or industry experts join for a period to develop an idea (either their own or one from the studio's pipeline) and maybe lead it as a CEO/founder.

Plus, studios often actively recruit founding CEOs or CTOs for specific ventures they've already validated. You can keep an eye on their websites and LinkedIn to be among the first to submit a direct application.

Some studios are open to external ideas if they fit their industry focus or thesis, and if the founder is willing to co-create and give up significant equity. And some builders, like Antler, run programs where individuals apply, form teams, and then develop ideas with the studio's support and potential investment.