High Alpha Venture Studio

The venture studio model is a new model for entrepreneurship, combining company building with venture funding in order to compress time, iterate quickly, and scale faster.

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Pioneering the Venture Studio Model

We started the first venture studio with a focus on creating a new model for entrepreneurship. A venture studio combines company building with venture funding in order to compress time, iterate quickly, and scale more ambitiously than would otherwise be possible. Since our launch in 2015, we’ve created 17 new companies—and counting—and invested in over 40 world-class founders that are changing the landscape of B2B SaaS.

Venture Studio

Venture studios differ from accelerators in a few ways, but one of the biggest distinctions between the two is the way companies are formed. Accelerators generally wait for an idea to come to them, brought by a founder who may have already started a company around the idea. In a venture studio setting, a built-in team exists to constantly ideate, test, and eventually execute on these business ideas. After an idea is validated, the venture studio supports the company financially and via hands-on, operational services. The idea behind the venture studio business model is that the studio is “creating its own luck” and starting the companies that the venture studio believes are viable and have a chance to provide returns for the business.

What is a Venture Studio?

Ultimately, venture studios are tasked with staying steps ahead of the market  and anticipating the needs of companies or consumers. Because of this, venture studios may focus on a certain industry, from fashion to food to artificial intelligence to B2B SaaS technology (like High Alpha). Startups that are developed in this way are typically powered via a venture studio fund as well as a group of experts and practitioners that work on the business through the venture studio. These advisors have specialized expertise in certain parts of business, like marketing, data science, design, or finance

Venture studios aren’t limited to tech hubs like San Francisco, Boston, or New York either — you’ll find venture studios across the Midwest, in places like Chicago, Indianapolis, and Detroit. As the venture studio ecosystem grows, the geographic distribution of venture studios will only grow more diverse.

The Venture Studio Business Model

The first step in the venture studio business model is to make sure that an idea is actually worth pursuing. In the validation stage, a team may conduct market research, create  financial models, conduct numerous customer interviews, test the market demand, and create an overarching startup business plan. From here, the most successful venture studios are able to build an MVP of a product, continue testing and iterating with users, bring on early customers, hire company leadership, and find investors.

Venture studios may provide services like finance, human resources and recruiting, marketing and PR, design and branding, sales and go-to-market, engineering, product design, back office support, office space, and more. The services and expertise offered will often vary from studio to studio, depending on their focus and own expertise.

Venture studio vs. incubator vs. accelerator

Venture studios design new businesses from the ground up by providing the critical research, infrastructure, talent, and resources that companies need to innovate and scale quickly. A venture studio model supports the idea that company success goes beyond investment — expertise in areas like design, finance, and recruiting are key pillars of company success. 

When comparing a venture studio vs incubator, a key distinction is that venture studios tend to build companies from the ground up. The venture studio acts truly as a “co-founder” in the business. Alternatively, incubators are just a support platform to help new companies to develop by providing services such as management training or office space, but they don’t help with day-to-day business operations. Whether companies should use a startup incubator vs. accelerator depends largely on the stage of growth of the company and the industry. 

Startup incubators help companies start from the ground floor, hoping to build out a business model and company. Incubators often focus on a specific industry or area of expertise, like fashion, food, or technology. Incubator resources often include office space and services like internet, and benefits like mentorship and expertise. They may also have a curriculum for incubator members.

An accelerator is also a completely different model. Accelerators are focused on accelerating the growth of an existing early-stage company. They are most helpful to company builders during a business’ first fundraising season, because there are often opportunities to pitch to many investors simultaneously and often culminate in an investor “demo day.” Accelerators can also provide social validation, networking opportunities, and benchmarking data to compare your company against other startups. On the other hand, accelerator membership usually only lasts for a few months. Accelerators only provide light support and guidance, and don’t get their hands dirty building the company alongside you. Additionally, as a member of an accelerator, you are usually part of a much larger cohort and may not get much focused attention.

Venture Studio Partners

Venture studio funds

A venture studio is typically led by a group of venture studio partners. Usually the idea being developed is complex enough to require a year or so to mature and seek external funding. In return, the venture studio takes a percentage of ownership in the company that is higher than a usual early-stage investment would be. 

The venture studio business model revolves around a pool of resources: they have shared tools, management processes, and human capital. Since these venture studios are building several companies each year with the same team, they are able to save money and reuse some of the same infrastructure, best practices, and playbooks. At any given time, High Alpha is building around five companies in its studio. The ideas for companies may come from a variety of sources: entrepreneurs may approach the venture studio with their own ideas, or an idea for a company may come from an internal team. Large corporations may approach venture studios with ideas for a product that solves a problem for the companies. At High Alpha, ideas also come from Sprint Week, which is a four-day business design process focused on building the Minimally Viable Business—including branding, prototyping, and go-to-market strategy—for our next portfolio company.

Venture studios are typically funded by outside investors, which is where they differ from startup studios. Venture studios raise funds for the studio and also have a traditional venture capital fund bolted onto the side of the studio. By creating new companies, a venture studio is making a bet that the money they put toward this new company will be returned over a certain number of years. High Alpha pioneered this model and was the first company to combine the two business models in 2015. Venture studios also typically take a higher percentage of ownership in the companies they build than a traditional venture capital firm or accelerator because of the added value they bring.

Venture Studio Structure

No two venture studios have an identical structure. Some may ask for more equity than others, or some may only serve a small slice of a certain industry. Some will be more hands-on, but as a whole, venture studios are invested in your success, and want to help see the company idea through, from conception to successful company.

Corporate venture studios can sometimes also partner with large, Fortune 500 companies as a source for new business ideas. Sometimes, these venture studios are built within a Fortune 500 company, serving almost as an internal R&D team. This allows companies to build products or services that solve a very specific problem with a white-glove, custom solution. The pros of corporate venture studios include stability, ease of access to resources like legal and finance, less admin focus, and immediate exit opportunities if the startup becomes successful. However, these companies are often limited by corporate biases, conflicting perspectives, and the inherent restrictions that exist in a large company. R/GA Ventures, Verify Venture Studio, and High Alpha are all examples of corporate venture studios or studios that have a corporate venture function (like High Alpha). 

Venture production studios, which are also called venture factories, provide funding that allows startups to streamline processes and drive revenue. Speed and scalability are the bread and butter of these studios. They are often very segmented and focus only on a specific type of work, which allows them to be streamlined and to function more like a factory. A drawback of the venture production studio approach is that much of the experience is templated. These studios often also have very strict criteria that companies must meet in order to be accepted. 

Finding Jobs at Venture Studios 

Jobs at Venture Studios

Want to get hired at a venture studio? Venture studios across the country are hiring, from New York to Chicago to Silicon Valley. If you’re located near a large metropolitan area, chances are that there’s a venture studio near you. Venture studio jobs aren’t for everyone, but for the creative and determined, a venture studio role can be perfect. 

Due to the variety of services provided by venture studio, there’s no certain college major or career path that you should take in order to break into venture studio jobs. A corporate venture studio may hire former corporate employees who have experience working in a corporate environment or on an innovation team. Other venture studios may hire based on the industry they actively serve — for instance, a venture studio like High Alpha that builds B2B SaaS startups may focus on applicants with past software tech experience. This rings especially true at venture factories, where speed and efficiency are king. The venture studio business model depends on the advice of its employees, so deep knowledge of a certain industry or skill set is very important. 

Jobs at venture studios run the gamut from administrative roles to data science to marketing and branding and everything in between. Typical venture studio departments include back office, marketing, finance, human resources, recruiting, venture, design and branding, product management, sales and go-to-market, and product development and engineering. Back office and infrastructure roles focus on the administrative, behind the scenes work that makes the entire company run smoothly. The marketing team handles things like content marketing, website, branding, social media, events, demand generation, PR, thought leadership, and more. The finance team may help the HR team with payroll, as well as taxes, budgeting, financial modeling, forecasting, and all the incorporation of the businesses themselves. The human resources and recruiting teams ensure that the company and its portfolio are staffed with the right talent. A studio’s venture team manages the venture capital fund, investing in both companies launched out of the studio and other companies. The design team at a venture studio may help design products, marketing collateral, websites, visual brand identities, and more. The product development team’s role varies from venture studio to venture studio, and may include building physical products or software engineering and data science.

Venture Studio Bloggers and Resources

Venture studio bloggers and Medium accounts to follow

Some of the best advice for future and current venture studio employees and startup founders comes from the people who do it every day. Venture studio bloggers share their expertise and experiences online so that other entrepreneurs and talent can learn from them. Some of our favorite VC bloggers (not necessarily venture studios) include Fred Wilson’s AVC, Brad Feld’s Feld Thoughts, and Tomasz Tunguz’s blog. Other venture capital blogs that we enjoy reading come from OpenView, First Round Review, Visible, a16z, Hunter Walk, Paul Graham, Sam Altman, and The Barefoot VC. Of course, you should also follow all of our content at High Alpha for great venture studio content and insights. 

The most successful venture studios

The most successful venture studios are specialized and hands-on. Some of the top companies that build and launch companies via the studio model are Human Ventures, High Alpha, expa, Pioneer Square Labs, Science, Inc., Betaworks, and eFounders.

Idealab, founded by Bill Gross in 1996, was one of the first startup studios. Idealab pioneered the startup studio business model and has started more than 75 companies. This startup studio predates the accelerator model, created by Paul Graham, by nearly a decade. In 2013, the number of startup studios hovered around 80. Today, there are more than 200 studios. In 2015, High Alpha evolved the model and pioneered the venture studio by adding a VC fund to a startup studio. Over the last decade, the venture studio category has grown by more than 5,000 percent. 

In addition to pioneering the venture studio model, High Alpha founded the Venture Studio Collective in 2018. Venture Studio Collective provides a platform for venture studios to learn from one another, collaborate on ideas and deals, and advocate for venture studios as an asset class. Currently, members of the Venture Studio Collective include Pioneer Square Labs, Idealab, Human Ventures, Polymath, Enhance, Global Startup Studio Network, Union Labs, Atomic.vc, and more.

Other Resources