What is The Difference Between Startup Studios and Venture Studios?
I gave a talk on Studios to some startup executives a few weeks back.
Once the group came to understand the model and goals of a Studio, someone asked a question about the difference between Startup Studios and Venture Studios. He had heard both terms and said they seem to be used intangibly.
He is right — but that is wrong.
Let me explain.
The question about the difference between Venture Studios and Startup Studios is a very common one.
As you can see from the poll results above, it’s also a heavily debated one.
To be honest, I thought most people would vote that they “are the same” — but I was (pleasantly) surprised. The results were split almost right down the middle.
It’s clear that … the Studio ecosystem is unclear on this one.
The Similarities Shared by Startup Studios and Venture Studios
Let’s start with the easy stuff — the things that everyone agrees on.
- Both models leverage shared resources and repeatable processes to launch new startup companies
- Both models rely on economies of scale to launch successful startups faster and cheaper each time around
- Both models build their own ideas and bring in EIRs with outside ideas
- Both models build startups in parallel
- Both models should choose a niche and apply industry-specific resources to the startups they build
At a high level, the two models are very similar.
They’re companies that create companies in parallel. Time, resources, and funds are used to create these startups and the Studio has a big equity stake in each of them. The goal of both models is to spin out successful ventures that will exit and return funds to the…