Venture studios: what every founder needs to know

After years in the wilderness, venture studios experienced a surge in popularity in Australia’s innovation ecosystem last year.^[1] And as they continue to shake off their negative image, some experts say this turnaround could be a watershed moment. So, we’ve decided to explore what venture studios are; and how they compare to other ecosystem support services and entities. That way, local founders can decide whether to hop on this emerging new trend.

What is a venture studio?

Venture studios (sometimes called start-up studios or venture builders) build brand-new innovation businesses from scratch.^[2]  They’ve been around since Bill Gross launched IdeaLab, the world’s first venture studio, in 1996. Venture studios are effectively start-up factories, typically creating and launching several start-ups each year. They can be sector agnostic or specialise in a specific vertical. But they all build new businesses in-house, from ideation through to company launch and scaling. Some venture studios focus solely on studio-led ideas and only consider concepts for start-ups devised in-house. They rely on their teams’ brainstorming and collective experience and new business ideas based market research and analysis which they conduct or commission. Other venture studios embrace founder-led ideas that meet the studio’s investment criteria. And then, there are venture studios that pursue a combination of studio-led and founder-led ideas.

What do venture studios offer?

Once an idea gets the green light, the venture studio seeks a founder to be its co-founder for that new business. Or it partners as a co-founder with the founder who pitched the idea to the venture studio in the first place. In return, founders share the equity in the start-up with the venture studio. This can result in the venture studio owning a 30-80% stake in the business.^[3] But in return, the founder is supported by the venture studio’s one-stop-shop for business growth services, including strategic advice, marketing, funding, operations, and so on. Currently, in Australia, venture studios tend to follow a founder-led ideas model.

Who can join venture studios?

Only founders with experience can apply to join venture studios. But what form that experience takes varies between venture studios, especially in Australia. For example, Cultiv8 seeks out seasoned founders who have launched, built and exited successful start-ups. Other venture studios, including Paloma, want to partner with founders with deep technology knowledge of a market or vertical. Then, the studio brings the funding, functional support and operational muscle to complement the founder’s capabilities. In Australia, we also have our own local take on the venture studio concept. UntilNow offers the founder-led model called Co-Creation. But its main offering, called Sweat equities, is tailored to established start-ups that are post-revenue or have secured funding. UntilNow crafts its engagement terms tailored to the start-up’s needs and cap table (a table showing the equity capitalisation of a company). UntilNow adds value to the start-up by providing strategy, design and technology expertise.

Why are venture studios having a moment right now?

The trusty meme from Zoolander hits the nail on the head; venture studios are so hot right now. We have our ear to the ground in the Radium Capital community, with our partners and across the wider innovation ecosystem in Australia. And what we’re hearing chimes with the recent findings of Cut Through Venture | Folklore Ventures 2024 The State of Australian Startup Funding. This report has framed the renaissance of venture studios in Australia as the rise of an underdog.

Shifting perceptions and playing catch-up

The 1100+ venture studios around the world ^[4] have chalked up runs of the board. Notable examples include: cleantech Comodule from Rainmaking Ventures, headquartered in London and NYSE-listed telehealth company Hims & Hers from leading US venture studio Atomic. But Australia, which at the time of writing has 11 venture studios ^[5], has remained skeptical about the venture studio model. Anecdotes about shifting cap tables and poor-quality support abounded, until now that is. Things are beginning to change. The emergence of new venture studios with refined business models has turned things around for this beleaguered member of the Australian innovation ecosystem. Tales of woe have been superseded by success stories. The meteoric rise of the invoice payment platform Marmalade from Paloma and brand-tracking platform Tracksuit from TRA Labs are making headlines instead.^[6]

Advantages of venture studios

One of the venture studio’s major drawcards for founders is their potential to reduce the risk of start-up failure. Here are the other main upsides of high-performing venture studios.

• Testing ideas from the get-go

Venture studios test all studio-led or founder-led ideas before creating and launching a start-up. For studio-led concepts, the venture studio will likely build a minimum viable product, test it with customers and seek evidence of a product/market fit before partnering with an entrepreneurial founder. Venture studios with a founder-led-ideas model, such as BetterLabs in Perth, move through a rigorous four-step process with founders who apply before they issue a terms sheet for the founder’s consideration. This, and similar processes at other venture studios that accept founder-led ideas, separates the wheat from the chaff and reduces the early crash and burn risk of their start-ups.

• Readymade team with resources

Founders who sign up with venture studios receive substantial resources to help them succeed, such as funding, office space and operational tools. From launch day onwards, these founders have the resources that would otherwise take months or years to assemble, which is quite the advantage.

• Deep and wide expertise

Venture studio start-ups gain immediate access to an array of industry experts and subject matter specialists. These include technology or support services such as marketing, finance and human resources, experienced founders and mentors, all of whom can advise on strategic and operational matters. Ultimately, all this hands-on support significantly boosts a start-up’s ability to succeed and the time it takes to get to market and scale.

• Access to extensive networks

The best venture studios have impressive networks that they connect their start-ups into. This can mean warm introductions to pre-vetted potential investors or partners when it’s time to scale or even customers for the start-up’s new product or service. Ultimately, attracting funds for scaling is often smoother sailing for venture studio start-ups, as is sales growth. ^[7]

Disadvantages of venture studios

For all their benefits, venture studios do have some drawbacks. Here are some of the main ones to consider.

• Less autonomy

With the venture studio providing most of the muscle and even the business idea, founders could find they have limited autonomy and minimal say in the direction the start-up takes. Experienced founders who have previously created, built and exited start-ups, may find this challenging. It can be a wrench for founders to remove themselves from networks and communities that helped create their successful start-ups. But if you decide to join a venture studio, chances are it wouldn’t go down well if you were to bring in your own advisers. So be prepared to step back from, or even leave any start up communities you currently belong to, and replace them with your venture studio’s team, suppliers and networks.

• Potential for conflicts

An environment that potentially affords limited autonomy for founders accustomed to calling the shots is ripe with potential conflicts. Obvious flash points include when the business vision of the venture studio and founder diverge, or when there are differences of opinion on operational matters. As well as the potential for conflicts at the top, it can be challenging for venture studios to assemble a highly motivated, cohesive team to support every founder and start-up they have on their books.

• Overstretched resources

As we mentioned previously, venture studios are start-up factories. So that means they ideate, create, launch and build multiple start-ups, at the same time. Even for the best venture studios, securing enough funding for several ventures, simultaneously, can be challenging. And if your start-up isn’t going well, you may not get the resources you were expecting or may need to turn things around.

• The studio comes first

Ultimately, venture studios have their own agenda: the success of their studio. They know that not every idea and founder they back will succeed. If your venture underperforms, you could be fired. While you won’t have to repay the venture studio if the start-up fails, your time at the venture studio will be over. Since the studio is not obliged to find you a new venture to lead, you will experience the same negative emotional and financial impacts of a non-studio start-up failure.

• Overdependence

If things go well and your venture succeeds, that’s great – right? Yes and no. Success ultimately means your venture will leave the cosy confines and support system of the venture studio. You will have to fly the proverbial nest one day. If you’ve leaned too heavily on the studio along the way, you and your business may struggle once it’s time to operate independently. ^[8][9]

How venture studios compare

Incubators and accelerators are the more established entities in the Australian innovation ecosystem that support start-ups. For an in-depth look at these, read our article, Incubators vs accelerators: Which one is best for start-ups? Beyond the key advantages and disadvantages of venture studios, let’s look at how their key metrics and features compare to other support systems for start-ups.

• Venture studios vs incubators and accelerators

Venture studios, incubators and accelerators are all involved in the early stages of building a new business. But only venture studios get involved in idea generation and the ideation process. While accelerators will often seek 5-10% of a start-up’s equity, venture studios look for 30-80%. But in return, their team plays an active management role. And they commit sizeable resources in the form of capital, operational assistance and expertise. But does this make a difference? The short answer is yes. Having skin in the game sparks a deep commitment by venture studios to the success of each start-up they produce. And their support is unwavering through the start-up’s growth journey.^[10]

• What the numbers say

Recent research specifically on venture studios found that their start-ups are 30% more likely to succeed compared to traditional start-ups. An impressive 84% of start-ups ‘graduating’ from a venture studio raise Seed capital. Of that cohort, 72% go on to have successful Series A rounds, compared to 42% of traditional ventures with Seed backing. Crucially, the average time from founding to Series A for venture studios is 25 months compared to 56 months for conventional start-ups. ^[11]

Choosing how to nurture a new business idea

Venture studios are still very much in their infancy here in Australia. If you do find a venture studio, it’s crucial to do your due diligence. And we also recommend heeding American entrepreneur Steve Blank’s advice when weighing up whether a venture studio is right for you. ^[12]

1. Successful venture studios are founded by successful entrepreneurs. Look for studio founders with track records of building companies that have $10 million plus revenues and over 100 staff.
2. Venture studios seeking 60% plus in equity are looking for an employee, not a co-founder.
3. Make sure your studio has raised more than $10 million in capital or they may not be able to support your venture as it grows.

Even if you find a venture studio that suits you, whether you join will come down to your personal preferences and circumstances. But ultimately, the rise of venture studios is exciting, with impressive numbers to back it up. So, while it’s not for every founder, the venture studio is here to stay.

 

 

[1] Cut Through Venture | Folklore Ventures. (2024). The State of Australian Startup Funding. [online] Available at: https://www.australianstartupfunding.com/.

[2] Gardner, J. (2020). Five Common Questions About Venture Studios. [online] Forbes. Available at: https://www.forbes.com/councils/forbesbusinesscouncil/2020/12/15/five-common-questions-about-venture-studios/

[3] Blank, S. (2022). Entrepreneurs, Is a Venture Studio Right for You? [online] Harvard Business Review. Available at: https://hbr.org/2022/12/entrepreneurs-is-a-venture-studio-right-for-you.

[4] Zwyssig, P. (2025). Summarizing the 2024 Venture Studio Research. [online] Linkedin.com. Available at: https://www.linkedin.com/pulse/summarizing-2024-venture-studio-research-peter-zwyssig-b0vwf

[5] Enhance.online. (2025). Enhance Ventures – the Venture Studio for the Future of Finance and Commerce in the $4T MENAPT Market. [online] Available at: https://enhance.online/studio-map#3.87/-34.06/124.09

[6] Cut Through Venture | Folklore Ventures. (2024). The State of Australian Startup Funding. [online] Available at: https://www.australianstartupfunding.com/.

[7] Startup Savant. (2024). What Is a Venture Studio? (Meaning + Examples) | TRUiC. [online] Available at: https://startupsavant.com/startup-basics/what-is-a-venture-studio.

 [8] Startup Savant. (2024). What Is a Venture Studio? (Meaning + Examples) | TRUiC. [online] Available at: https://startupsavant.com/startup-basics/what-is-a-venture-studio.

[9] Volkan Kirtok (2024). What’s a Venture Studio? Everything You Should Know About Studios. [online] Medium. Available at: https://medium.com/@vkirtok/whats-a-venture-studio-everything-you-should-know-about-studios-e35e7769203a

 [10] Openvc.app. (2018). How startup studios build and grow startups. [online] Available at: https://www.openvc.app/blog/startup-studios

 [11] marty@gan.co (2022). 2022 Startup Studio Data Report – Morrow. [online] Morrow. Available at: https://morrow.co/2022-startup-studio-data-report/

[12] Blank, S. (2022). Entrepreneurs, Is a Venture Studio Right for You? [online] Harvard Business Review. Available at: https://hbr.org/2022/12/entrepreneurs-is-a-venture-studio-right-for-you.