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January 20th, 2015 at 4:00 pm

Venture Builders: Changing the start up model

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Have you heard of venture builders?  Venture builders, also know as tech studios, startup factories, or venture production studios, are organizations that build companies using their own resources and ideas.

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Unlike incubators and accelerators, venture builders don’t take any applications, nor do they run any sort of competitive program that culminates in a Demo Day. Instead, they pull business ideas from within their own network of resources and assign internal teams to develop them (engineers, advisors, business developers, sales managers, etc.).

You’ll want to get used to the idea because we’re going to see a lot more venture-building organizations emerging.

Venture builders develop many systems, models, or projects at once and then build separate companies around the most promising ones by assigning operational resources and capital to those portfolio companies.

In its most basic form, the venture-building company is a holding company that owns equity in the various corporate entities it helped created. The most successful venture builders are, however, much more operational and hands-on than holding companies: They raise capital, staff resources, host internal coding sessions, design business models, work with legal teams, build MVPs (minimum viable products), hire business development managers, and run very effective marketing campaigns during their ventures’ pre- and post-launch phases.

Technology futurist, serial entrepreneur, and angel investor Nova Spivack is part of the early technologists who pioneered the venture production studio model. He wrote about the model in 2011 at a time when most of the elements that make it up were still in gestation. Nova actually invented the Venture Production Studio term, calling it a “new approach to building startups.” This new approach certainly paid off, as his own venture production studio enjoyed multiple exits three years later.

A Rising Movement

The venture-building philosophy is a rising movement in the tech and startup industries. The most notable venture builders include Obvious Corp, which spun off Twitter and Medium; Mark Levin’s HVF (Hard Valuable Fun), which produced Affirm.com and Glow.com; Betaworks, whose portfolio includes Instapaper and Blend, and Germany’s Rocket Internet (PayMill, Jumia, FoodPanda, etc.). Although these highly successful companies have obvious differences in their business models, they also have significant characteristics in common. They use shared resources (capital, teams, connections, etc.) to launch solutions that then operate as fully-operational companies.

The venture-building movement is starting to become more popular outside of the United States as well: The Netherlands gave us StarterSquad, the self-proclaimed “European version of Betaworks”; and the South African team at Springlab had made the entire African continent proud with their innovative joint-venture business model.

Image credit: Heisenberg Media
Via VentrueBeat


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