Learn how venture studios work, why they might be an attractive option for some entrepreneurs, and what questions to ask if you’re considering joining one.
. This is because companies exiting a venture studio have been handed a startup that has de-risked of much of the early-stage startup process.
Why would an entrepreneur join a venture studio and give up the majority of their company rather than go to an accelerator? Most accelerators tend to look for a “founder type” — a stereotypical techie, fresh out of college, who already has an idea and cofounders. Most people don’t fit that pattern. Yet many are more than capable of taking an idea that’s been stress-tested and validated and building it.As we got up to leave, Carlos asked, “How would I know whether the venture studio is a good one?”
It was a great question. While there are no hard-and-fast rules, I advise entrepreneurs to ask these four questions:The most successful venture studios are founded by entrepreneurs who have previously built companies with $10+M in revenue and had 100+ employees.The answer will be directly proportional to what they think your value is. Firms asking for greater than 60% are actually hiring an employee rather than a founder.
A few weeks later I got a note from Carlos letting me know that he found that there was a venture studio in his city, another run by the state, and a third in his region focused on manufacturing. He had applied to all of them.Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Business Case Development. Earn badges to share on LinkedIn and your resume.
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