Recently, we announced the launch of the MVP Factory Venture Studio with the aim of reinventing corporate venture building as we know it by applying principles of leading venture builders to the corporate world. With MVPFVS we build founder-centric ventures under "real world" circumstances. Essentially, founders get a competitive pre-seed deal and Corporates get access to a relevant start-up portfolio.
The ecosystem of companies supporting startups both financially and operationally is very diverse. While venture capital firms provide startups with the capital they require to grow, oftentimes without providing extensive amounts of operational support, startup accelerators and incubators provide a lot of operational support and tend to invest significantly less money (if any). Venture studios (also known as startup studios, startup foundries or startup builders) are yet another category in this ecosystem that combine the best of two worlds: the financial resources required to build a company and the operational, hands-on support required to get the company off the ground as quickly as possible to unleash its disruptive potential. To enable this, venture studios often act as a matchmaker between suitable future founders and relevant problems to be solved, if the founders do not already have an idea they want to work on upon joining the venture studio.
But what is it that future founders want and need when they consider starting their own company? Let’s have a look at some of the advantages that starting a company together with a venture studio can have:
- Experience: Being able to showcase a portfolio of successful startups and products built in the past clearly demonstrates the experience and ability of a venture studio to build startups in the future - at MVPF Venture Studio, startups are supported by serial entrepreneurs, investors and domain experts with many years of relevant experience.
- Capital: Raising money for an idea is tough. Venture studios provide a solution for this problem as they invest into an idea at the pre-product stage and offer support in subsequent fundraising processes - for example, with our Venture Studio we created with our partner DB Schenker (Schenker Ventures) to transform the logistics industry we will invest a pre-seed funding of €300,000 to get your startup off the ground and support you in future fundraising rounds.
- Unfair Advantage: Money isn’t the only thing that’s critical when building a company. Access to relevant know-how, people and companies in the industry can accelerate growth tremendously and create an unfair advantage other startups don’t have - at MVPF Venture Studio, DB Schenker does not only provide a pre-seed investment but also logistics expertise as well as access to its huge customer and partner base to give your startup the support you really need.
- Operational Support: When starting a company, founders are faced with an overwhelming amount of challenges at once, including e.g. product development, sales and marketing, finance, HR and many more - at MVPF Venture Studio, startups have a team of experts by their side from which they receive full support in all of the aforementioned areas to become successful.
- Commitment: As explained before, venture studios receive some equity in return for their investment. This means they have “skin in the game” from the start and want to see their startups succeed - this is also the case at MVPF Venture Studio: the equity we receive in return for the capital and operational support we provide demonstrates our commitment and aligns long-term goals
But eventually, the outcome is the most important criteria for success and the advantages of founding a company with a venture studio manifest when looking at some facts and figures highlighted by the Global Startup Studio Network:
- An overwhelming 60% of startups founded with venture studios eventually raise a Series A funding round, compared to all other startups of which only 30% raise a Series A round
- Not only do 60% of startups founded with a venture studio eventually raise a Series A round, but the time to get there is less than half of the almost 5 years that all other startups need to get there
- Also the time from zero, i.e. the starting point, of a company founded with a venture studio to the completion of its seed round is on average less than a third of that of other startups (11 vs. 36 months)
Quite staggering, isn’t it?! Yes, we think so too. If it sounds interesting to you and you want to become an Entrepreneur to start your own company we’d suggest to get in touch with us here!