People are always trying to find new ways to make money, and for some people, the challenge of running a new business and taking it to success is like a drug. They simply cannot have enough of it and are always on the lookout for opportunities to do so. In the old days, people like that were called venture capitalists, and they still are.
However, things have changed quite drastically in the last decade and a half. A new breed of investors has come forth in the form of groups dedicated to taking on new challenges and making startups successful. For any new business looking for help, these are the perfect place to start as they provide an incredibly large quantity of knowledge to any business they like. For the last few years, these people have started offering their services to new businesses as groups called venture studios. These people come into a startup and provide all the strategic help they need to go from an unknown startup to a recognized brand.
Different Approach
The primary thing that sets a venture studio apart from a typical investor is the approach they take. Here is what each of them does once they get engaged with your business:
1. Investors mostly like to sit on the sidelines and let the business do their thing and hope they made the right call. Of course, they do not make such decisions without thorough research, and you can feel that whenever you pitch a business idea to an investor. They keep an eye on the way your company’s finances are performing, and as long as they are happy with that, they let you do your thing. If they feel like you need some advice at some point, then they do reach out to you.
2. Working with a venture studio is a much more hands-on experience as they provide all the strategic and expert help that you need to grow your business. They also get involved in the everyday running of your business and provide a lot of support. These are the people who get you ready, so you can face the VCs once your business grows to a sufficient level. The studio employees, who provide you with the guidance and help, can either stay and work with you once you are stable or go back to the studio to find a new startup to work with.
Types of Venture Studios
Currently, you can find two distinct models when it comes to venture studios, and they are both defined here.
1. Independent Venture Studios is a studio that has the primary focus of helping a startup find its foundation. They provide strategic support and manpower that the startup needs to establish itself, along with some capital as well. Typically, the funds are either from the studio’s own capital or gathered from external investors. The decision regarding the injection and use of funds and resources lies with the principal of the studio.
2. Corporate Venture Studios, on the other hand, have a completely different approach where they provide the resources a business needs by making it a cooperative between the startup and a medium or large-sized enterprise. The talent and money is also coming from the same source and the focus is a lot more capital-heavy than its independent counterpart. The risk involved in this is a lot higher but so are the rewards if the business succeeds.
Final Word
Venture studios are a phenomenally successful concept due to their airtight approach. They find the right opportunity and invest in the right people with experience to help run the company properly until it becomes stable and prosperous.
