July 29, 2021
While many of us take a few well-deserved weeks off during the summer, we at StudioHub keep on rolling at the same pace. This month, we had the pleasure to host Elliott Parker, CEO of High Alpha Innovation. High Alpha Innovation is the Corporate Venture Studio of the well-known, Indianapolis-based Venture Studio High Alpha: Founded as a Studio Company, High Alpha Innovation supports large corporations and universities to unlock tangible innovation and launch a steady stream of startups.
As a reference to Elliott’s great experience in Venture Building, he shared with our community the common traits of successful Startup Studios and gave an outlook of the Startup Studio Model. Keep on reading to receive the key findings of our insightful, more strategic webinar. In addition, make sure to follow us on LinkedIn and join our LinkedIn group to not miss the next webinar sessions.
Taking a closer look at leading Venture Studios such as High Alpha, Idealab, or PSL, up to seven success factors in particular recur. All leading Venture Studios have taken these components into account and nail them in their own fashion. These elements are…
Besides a centralized building function, a dedicated source of financing is one of the key aspects of successful Startup Studios. This enables founding teams to fully focus on building a great startup in record time. There are several investor groups out there investing in Venture Studios. In case you need an overview, we have classified key investor groups in an earlier StudioHub blogpost. In addition, multiple ways of structuring a Studio Fund exist - a Medium Article by John Carbrey might be a great start on this topic.How is it done at High Alpha? The Venture Builder distinguishes between funding studio operations and early traction of startups on the one hand, and the subsequential funding rounds and scale on the other hand. For this, High Alpha set up a separate Venture Fund.
In order to build and finance companies on a large scale, Studios need a strong network of founders and investors. One of the largest bottlenecks is the access to great entrepreneurial talent. What to look for in a co-founder you might ask? Two characteristics in particular: First, the ability to build and lead a team. Second, the ability to tell stories and communicate a vision.The bottleneck resolution: High Alpha establishes and participates in several ecosystems as well as invests in external startups. A startup idea usually gets staffed with an external CEO, CTO, and CCO/ CSO.
A playbook on how to launch and support companies post-launch is equally important to fully focus on building great companies. This way, founding teams can follow a proven path and don’t get off the track easily.For example, High Alpha divides its process book into three high-level steps: Ideation and exploration, sprint week, and launch and scale. Building on the lean startup principles, the process book deviates only in details for founding companies with founders or organizations.
Designing structures and incentives that align with a Studio's mission will keep the flying wheel spinning. The component can range from having balanced structures and diverse teams during ideation to distributing the equity shares fairly to mitigating conflicts of interest while investing in external startups.
Working hands-on alongside founding teams and offering a variety of services - that’s one differentiating aspect of the Venture Studio Model. To deliver on this promise, Studio team members are experts in their respective fields.Which services does High Alpha’s studio team offer to innovate and scale quickly in competitive markets? A long list: Product development, marketing and PR, sales and GTM, brand and design, finance, fundraising as well as recruiting and HR.
This is especially true for the early days of a Startup Studio. Make sure to focus on a specific sector, geography, or other relevant criteria. For example, High Alpha is specified in B2B SaaS companies.
While we see many Venture Studios succeed around the world, these are still the early days of the entrepreneurial model. Expect the model to evolve and gain further attention in the ecosystem: Studios will identify more innovative ways of launching, funding, and scaling businesses in the future. In addition, investors and other stakeholders still need to get comfortable with seeing Venture Studios on the cap table - just as they are now with Accelerators.That’s it, these were our key takeaways! If you are a premium member and would like to dive deeper into the best practices of Startup Studios, make sure to revisit the webinar recording and presentation. Not a premium member yet but interested in becoming one? Just reach out to us.
Elliott Parker is the CEO of High Alpha Innovation, following his passion for unlocking tangible innovation through engagement between large companies and startups. Prior to High Alpha Innovation, Elliott led business design at High Alpha. In addition, he has also worked in strategy consulting at Innosight, in corporate venturing, and as an entrepreneur to bring new ideas to market.