Hi all! Our past few weeks have been packed with events and meetings focused on venture builders. In case you missed the memo, here are some valuable insights for those just starting to explore investments in studios, and here are tips and tricks for both studio founders and investors.
Now, some news that grabbed our attention in the last two weeks. Apart from the OpenAI drama, there's already a plethora of both sensible and absurd materials on this topic 😅. By the way, the prize for originality goes to TechCrunch's "How to discuss the OpenAI drama at Thanksgiving dinner."
As for our favorite meme, of course, it's from Twitter (we're not yet ready to call it X).
In the ever-evolving landscape of venture studios, a more accurate term is gaining traction in the market — "company creation funds." This term distinguishes itself from the misused "venture studio," mainly in the context of traditional accelerators. So, company creation funds (they are venture studios or builders) consistently generate ideas for technology startups, nurture them, and attract external co-founders — all while keeping the foundational ownership stake intact.
Specifically, the term "company creation funds" is championed by the Vault Fund (which invests exclusively in venture studios). Its team surveyed 200 emerging companies that are building new capabilities as founders and co-founders within their portfolios, and here is the scoop:
Fun fact: studios are 2x more likely to choose traditional fund structures than holding companies. Why? They often raise from LPs that are active in traditional early-stage venture capital, and have a significant bias toward investing in classic funds.
Meanwhile, we at Uniborn are sympathetic to a dual entity model — combining the advantages of a holding company and a fund. We scratched the surface in our recent mini-conference, and you can bet we'll be digging deeper in future articles and talks.
Check the Vault Fund report for a deeper understanding.
Peter Walker of Carta seems to have figured it out.
Just over 27% of companies that secured a seed round in 2019 successfully advanced to Series A within two years. By contrast, less than 18% of companies that made it past the seed stage in 2021 managed to advance to the next round.
What about industry-specific nuances?
As for predictions, forecasting results, even for the current year, is a challenging undertaking, let alone for the future. It's possible that the number of lucky ones will experience an increase as founders change their cost structures to avoid the need for fundraising.
Check Peter Walker's review for a deeper understanding.
Cover image: Unsplash
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