Current State of Venture Building

August 18, 2021

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After conducting 25+ interviews, analyzing 800+ data points, and writing 30+ pages: Our industry report is finally out! It is the most comprehensive report yet published on Venture Building, containing valuable industry averages, benchmarks, and best practices on a wide range of topics. In the report, we cover newcomers such as Kaas, growing rockets such as The Heart, and experienced trendsetters such as Idealab.

If you are a premium member, you have gained full access to all insights. Not a premium member? No worries, we got you covered with some key insights. Just continue reading and have a glimpse at the report outline.

A Win-Win Model

The Studio Model holds unique advantages for all stakeholders involved: Investors, entrepreneurs, talents, founders, and corporations. For investors, the model is the ultimate investment opportunity given its higher returns, lower risks, and shorter exit timelines. Experienced entrepreneurs have an efficient vehicle to build several businesses simultaneously from ideation to scaleup. Similarly, talented teams receive a great learning opportunity of dealing with risk, applying their creative and analytical skills, and working alongside great minds. Corporations and founders alike benefit from having a strong innovation partner who provides a proven, de-riskified process for building startups and shares best practices along the way.

Proven Process Organization

According to our analysis, 66,7% of Startup Studios have a process for ideating business ideas in place. Moreover, 47,1% generate new ideas internally, followed by 35,3% that generate ideas both internally and externally. Only 17,6% of Studios build on ideas from external founders.

A striking share of 88,2% of interviewed Studios use a standardized process for creating new ventures. The other 11,8% customize their process for each startup.

Additional insight: With a Startup Studios’ experience increases the likelihood of having standardized processes in place

Portfolio Companies on Financing Track

Likewise, the number of ventures created each year depends on the maturity and experience of a Studio. On average, experienced Startup Studios build up to 5 new companies per year, while early-stage Studios create 1 startup per year.

Looking at the company portfolio, 88% of the companies are active and 12% have failed. Among the active startups, 28% of the ventures are not raising funding yet, 42% are raising or have completed a Seed round, 15% have raised a Series A round, 9% a Series B round, and 6% exited.

Additional Insight: According to an academic study available to us, 61% of portfolio companies exited at the seed stage, 76% of portfolio companies exited latest at Series A.

Growth as Future Plans

Expansion and funding - both topics are on the agenda of Startup Studios. 26,1% of Studios plan to open offices in other countries, 17,4% plan expanding to other verticals. Moreover, Studios are either raising funds (13 %) or are planning to do so in the near future (13%).

Additional Insight: Two experienced Studios made headlines in 2021 and went ahead as role models: PSL raising $100 Million and High Alpha raising $110 Million in venture funds to continue financing exciting businesses.

Final Note

What’s next? Given the many advantages of the Studio Model, we believe that Startup Studios are a lasting trend with increasing importance within the entrepreneurial ecosystem. Of course, we at StudioHub are committed to raising awareness of the Model and sharing best practices within the community.

To always stay up to date, make sure to follow us on LinkedIn and join our LinkedIn group. In addition, reach out to us if you are interested in becoming a premium member.

About the Author

Hannah Van Vorst

As Business Analyst at StudioHub, Hannah is always identifying new opportunities to expand the community and service portfolio. In addition, she builds the IT process organization at a corporate scale-up as well as mentors founders on business model design and fundraising. If Hannah isn’t in front of her laptop, she is hiking in the beautiful countryside and listening to podcasts.

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