Welcome to the frontier of innovation that doesn’t get VC Twitter likes or SXSW panels, the mud-covered, steel-reinforced, and sometimes radioactive frontier of “Tough Tech” (my word, I’m trying to come up with something to distinguish not-consumer, not-university, not just-apps). This isn’t SaaS, crypto, or your fourth AI wrapper for ChatGPT, this is the real economy: agriculture, water, energy, geography, oil, minerals, metals, and waste. This is where building a venture studio likely matters most but is also likely hardest to build. This is also where most smaller towns need to focus, since software engineers capable of anything aren’t valuable in an every-city-has-coders world; to thrive, every city should build innovation and entrepreneurship based on the resources and experiences they already have, rather than trying to reinvent themselves as Also-Silicon-Valley.
Foremost, why a Venture Studio and not an Accelerator?
If coworking spaces are adult dorm rooms and accelerators are speed dating for startups (which, by the way, they aren’t and shouldn’t be, but most are no better than networking spaces), venture studios are a bit more like the parents who actually raise the company, having done the fun part of R&D to make the baby. They don’t rent desks or throw demo days, they birth the business, hire the team, provide the infrastructure, and stay up all night doing the hard work until it can survive on its own. A venture studio isn’t your investor. It’s your cofounder. It doesn’t wait for pitches. It generates ideas, validates them, builds the founding team, and stays embedded through market-product fit (yes, I know it’s product-market fit, saying it the right way is wrong) and scale.
I’ve been following John-Erik Hassel and Matthew Burris, two of the leading authorities on venture builder models, and through their work published, I wanted to take a closer look at the economic impact of venture studios by way of how we might specialize them for tough tech towns. “I find that venture builders aim at reducing risk and maximizing return on investment by pre-defining a uniform outcome following its for-profit nature, noted John-Erik Hassel. “They therefore aim to produce and support startups like on a factory assembly line. Venture builders aren’t just incubators, accelerators or investors.”
In the realm of Tough Tech, where you can’t just code your way out of a broken water grid or soil degradation, this model is not just helpful, it’s necessary. Venture studios solve the failure point of every incubator that thinks innovation means inviting ideas from the outside and hoping someone has the grit to follow through. Studios flip that script: they start from the inside, align capital and capability from day one, and only spin out companies when they’re built to survive the regulatory gauntlet and supply chain chaos that define industrial transformation. In other words, this isn’t startup theater, it’s startup manufacturing.
“The venture studio model has produced some of the most promising companies of the last decade—with net IRRs that make traditional VC look soft. 60% Average net IRR is a slap across the face to VC’s ~30% top quartile returns.” – Matthew Burris
A Tough Tech Venture Studio is a masochist’s playground, an economic developer’s answer, and a bureaucrat’s worst nightmare. You don’t iterate your way into carbon-neutral ammonia production or vertical geothermal wells. You engineer, permit, dig, deploy, and pray the sensors work. So, how do you structure a venture studio that doesn’t blow up (literally or financially)?
Article Highlights
- Building a Venture Studio
- What is involved in a Venture Studio?
- Sources of Capital: Asset-Heavy Meets Network-Rich
- Real Estate: Buy Dirt or Co-Locate
- Partners: Not Advisors! Operators
- Ideation and Validation: Engineering Meets Empathy
- Team Building: Hire for Scar Tissue
- Resource Provision: Stack the Deck
- Active Involvement: Embedded Co-Founders
- Scalability Focus: Commercialization or Bust
- Long-term Relationship: The Studio is the Startup
- Equity Stake: Earn It, Don’t Demand It
- Build What the World Actually Needs
Building a Venture Studio
Legal Structure: LP/LLC Hybrid or Series LLC
Set this up as a dual-entity model. The studio itself should be a C-Corp or Series LLC (for asset protection, pass-through flexibility, and governance clarity). The startups spun out of it can be Delaware or Texas C-Corps (Texas given the recent changes in Texas that make it as ideal as Delaware), backed by standard convertible instruments. If you’re dealing with infrastructure or land, use LLCs to hold and manage those hard assets. Consider a holding company with subsidiary SPVs for each venture. This lets you separate risk, allocate capital cleanly, and offer unique participation for aligned partners.
What is involved in a Venture Studio?
Sources of Capital: Asset-Heavy Meets Network-Rich
You won’t fund this on pitch decks alone because the model of a venture studio is not that of real estate, incubator, or startup; in effect, it’s all three. You’ll need a capital stack as layered as an oilfield geology survey:
- Philanthropic or catalytic capital from family offices or place-based funds (Rockefeller Foundation, Schmidt Sciences, etc.)
- Public-private grants (DOE, USDA, SBIR, NSF, ARPA-E)
- Strategic investors like ag conglomerates, water utilities, defense contractors, and energy majors
- Institutional LPs interested in ESG, climate, or sovereign tech
- Real asset capital: tap infrastructure funds and REITs for co-locating physical assets
Your investor deck won’t be sexy (though the elevator pitch can and must be) it’ll be a 40-page PDF with cash flows, land leases, energy credits, and geological risk profiles. Own it.
Real Estate: Buy Dirt or Co-Locate
Tough Tech doesn’t work from WeWork. You’ll need physical infrastructure:
- Labs: For materials testing, sensors, bio-agriculture, and fuel cells
- Pilot fields: Agtech needs land, water tech needs flow
- Warehouses and micro-factories: For prototyping, testing, and early production
- Co-location with national labs or private R&D clusters: Piggyback on their testing and compliance systems; look for Opportunity Zones, industrial districts, or underutilized public land.
Partners: Not Advisors! Operators
If you think “mentor network” or referrals to investors gets startups anywhere in this world, you’re still thinking like an inexperienced software founder. You need:
- Universities, not to own your companies or gatekeep IP, but to expose their research and patents to student entrepreneurs who are empowered by your studio to commercialize in the private sector
- Industry consortia like the Clean Energy Buyers Association or AgriTech America
- Economic development corporations who want jobs, exports, and capex
- Fortune 100 strategic partners who will pilot and buy your stuff
- Veteran operators from John Deere, Halliburton, Schlumberger, Archer Daniels Midland This studio should serve as the free-use commercialization engine for academia: allowing founding teams to start companies without shackling them to the molasses of tech transfer offices.
Ideation and Validation: Engineering Meets Empathy
Here’s where most incubators and accelerators fail: they teach people to talk to customers as though customers of an existing thing know how an innovation will work. They try to brainstorm ideas with sticky notes and LinkedIn polls; ignorant, when what works in startups is execution (marketing and delivery), not an idea seeking funding.
In venture studios, you validate because people that have experience know that they’re doing:
- Teams comprised of industry entrepreneurs
- Talking to growers, drillers, utility managers, and farmers
- Reverse engineering IP portfolios from public datasets and research databases
- Using geographic data, water rights, climate impact reports
- Participating in standards boards and regulatory bodies
Your ideation is not a sprint. It’s trench warfare.
Team Building: Hire for Scar Tissue
No MBAs or pitch contest winners. You want:
- Former founders who’ve failed in hardware (yes, they’re experienced and determined)
- Principal investigators from DOE/NSF-funded projects
- Product people who’ve built hardware/software interfaces
- Regulatory and environmental consultants
- Public Affairs professionals to deal with the institutions, legislators, and market impact
- CFOs who can finance infrastructure AND equity rounds
Resource Provision: Stack the Deck
Centralize key shared infrastructure:
- Marketing: not advertising or promoting (though sharing that is helpful), knowing the market
- Legal: land use, IP, permitting
- HR/People: Hard Tech HR is different; it’s union-savvy, safety-minded
- Fundraising: grant writing, pitch decks, SBIR, tax credit monetization
- Manufacturing: shared prototyping, CNC, 3D print, microbatch labs
- Regulatory: food safety, emissions compliance, FDA/EPA/DOE reporting
- Storytelling: documentation, science comms, policy decks
Active Involvement: Embedded Co-Founders
You don’t advise the startups. You are the startups. Studio team members are:
- Interim CTOs, ops managers, BD leads
- Board members with operational stakes
- Co-signers on grants and pilot agreements
- Marketers so that the ventures have markets
Scalability Focus: Commercialization or Bust
You don’t scale via paid ads. You scale by:
- Proving unit economics at small scale
- Securing public-private procurement (municipalities, ag cooperatives)
- Partnering with OEMs and infrastructure providers
- Licensing tech to multinationals with existing scale
You have to industrialize the startup, not just grow it.
Long-term Relationship: The Studio is the Startup
These aren’t portfolio companies. They’re limbs of your body.
- Stay involved through Series A and B
- Keep equity even after outside teams take over
- Serve as the manufacturing and regulatory arm long-term
You’re not an accelerator; you’re a womb.
Equity Stake: Earn It, Don’t Demand It
Venture studios typically take 30–50% at pre-seed and dilute down over time. But it’s not about the stake, it’s about contribution:
- Who did the science?
- Who secured the land?
- Who did the pilot?
Split remaining equity with the team according to labor and capital; cliff everyone involved in a new venture and then vest based on time and contribution. You too, be a cofounder, not a landlord.
Build What the World Actually Needs
Tough Tech feeds us, fuels us, and cleans up the mess the last century left behind. A venture studio in this space must be willing to shovel manure, wear hard hats, and explain geothermal rights to confused city investors. It’s not glamorous, it’s essential, and it’s critical that if you’re hoping to transform your town to better serve the new economy, attract entrepreneurs, and create jobs, you need to do this; not coworking spaces, not an accelerator, and not some incubator pretending to help, build a venture studio designed for the sectors already strong in your city.
If you’re serious about building this, I want to hear from you. Because the world doesn’t change through SaaS dashboards and buzzword decks. It changes through sweat, steel, and the stubbornness to turn atoms into value.
Offline is the new online. Dirt is the new digital. IRL is the new simulation.
Agreed.
The fact is, most people aren’t obsessed with tech the way most media and tech types think they are. Most people are just trying to live a good life, pay their bills, etc. A nice phone helps, but it’s not a savior. They hope – and some pray – their local community is supporting them in that effort. It’s that simple.
Not to get off track, but to watch any mid to large city’s local news and NOT hear of another shooting a/o (drug) overdose would be truly innovative.
/rant
Mark Simchock Soooo true. I just lost my cool a bit because Hilton directed me to their app to deal with something at a hotel. I don’t want to use the damn app!!!
Love the detail and nuance here Paul O’Brien. It really is a different model that steps well beyond strictly investing and takes on an operator and an entrepreneur role in building companies. Venture Capital is largely a spectator sport. Invest and then watch and check in from time to time. Venture Studios like buying in and building a franchise team. There was investment, but the ops are worlds apart.
Who regulates what the Venture studio does in your spec?
Many of us Founders dream of that spec.
My vote? No one regulates it
A studio as a co-founder makes sense…. as long as it brings as much (or more) than a co-founder, costs no more, and accepts the same terms.
Paul O’Brien how does the Founder choose and be sure the standard isn’t just made up along the way. And the same for the Investor investing into the studio?
Georgina Bowman when the rate of startup success actually grows beyond 10, and incubators and accelerators meaningfully impact that change, then I’ll put faith in standards. Until then, they certainly should be making things up along the way – all the conventional wisdom is freely available online; there is no reason to want the standard (and certainly no reason to want business owners or governments trying to decide for entrepreneurship)
Great article, Paul….and timely. We need to talk.
Chris Coleman I’m here
Not as “freely” as before 🙂
Paul O’Brien you right. My experience in building TechnoSpark – pure hardware venture studio that launched 120 startups from 2011 to 2021 – shows the difference. Below you can find some numbers.
https://www.linkedin.com/posts/denis-kovalevich_startupstudio-venturestudio-entrepreneurship-activity-7174683137426210816-iVHd
You have described what a lot of us in Tough Tech are searching for – a partner, not a landlord that wants to build ecosystems. Build the ACTUAL systems! I’ve got an opportunity for the right people… Shandoka: Electric Motorcycles
Ernest, I hear you, and if investors and cities were smart, they’d be doing more of this and less coworking / accelerator.
I like this Paul O’Brien. How do I get involved?
Carla Viegas-Barber in general or are you taking away from this that I am doing something specific?
I am *not* developing one in particular. I’m involved in a lot of talks from interested parties throughout the world, but most are good intentions but no resources. My work is now public policy/legislative, I’m writing more such that it points out to governments that they’re doing it wrong… trying to push changes.
How to get involved in general? Everyone needs capital. Lawmakers need education. Most need better alignment of networks (people) so that it’s not just “startup” or “tech” people echoing the same things at one another – that, the people doing the work in specific sectors, need to be connected with investors, lawmakers, and potential partners, within that specific sector.
Well said Paul O’Brien
Pitched exactly this 5-6 years ago in Houston to major CVCs at EPCs, operators, etc. Main goal was to get them to decide on which problem areas are worth time and money investment, AND must do PoC/pilots. Most of them just decided it was easier to sponsor the next big innovation district or accelerator.
Kenley Clark lobbying change is a plodding process
Let them do what they want, guide otherwise, and they call you back when it fails …. But also notable: CVC, local City, and economic development offices actually *don’t* have the same objectives as VCs and founders – they want headlines and to look like they’re doing something meaningful. Doesn’t matter to them if the rate of success remains the same.
Oh I know.
Joe Alapat Austin Langley food for thought
Let’s talk. I’m building a venture studio at intersection of ai and blockchain focused on evolving the institutional capital stack.
Ely Beckman cheers. How might I help? What are you struggling with or what outcome are you working on at the moment?
Seyi Fabode
Very interesting. Points are on the nose. Would love to hear more from folks on their financial structure (capital, management of ops burn, long term model) as well as partnership thoughts (who, ideally, is in the ecosystem).
Christopher Mismash same. Seems the business models are all over the place, with few standards or norms that might help the entrepreneurs and investors get these started. Digging deeper.
Very cool Paul. I am going to share with you on a DM my thoughts on this and how I have been trying to build this
We’re building one in London, focused on climate tech, with our own wet chemistry labs. About to launch company number 7, would be interested to talk.
Andrew Aryee Boxplay Ventures
This resonates with the work we are doing, Paul. Thanks for articulating.
Love this article! This is exactly what we’ve built over the last 3 years in Canada.
This! Fantastic breakdown of what a venture studio really is. So many people co-opting the term now, but this is the actual meat of it. Roll up the sleeves and get *in!* 🙂
Thank you!
I operate out of a quasi-venture studio in Bastrop County. I like the idea! One word of caution is “safety”. Things can go terribly wrong quickly in tough tech.
Might be only Tuesday, but this is the best thing I’ll read all week.
Chasing the bright shinies is NOT the only way. Even Frank Lloyd Wright needed bricks and sewers.
Kelly E. Chasing the bright shinies results in a lot of waste
This is the most grounded take I’ve seen in a while. Real innovation is messy, physical, and deeply local. A venture studio that can navigate land, policy, and production is exactly what tough tech needs. We can’t demo-day our way to infrastructure.
Paul O’Brien you might like this – I distilled the last couple of years incl. 45 venture learnings: https://www.linkedin.com/comm/pulse/things-i-wish-knew-before-building-tech-venture-studio-peter-zwyssig-kodkf
The Bell Mason Diagnostic is the curriculum/playbook!
I think there seems to be a core community I consistently see on LinkedIn on these posts — anyone want to make a more concrete conversation space? Does it already exist?
Christopher Mismash
Matthew Burris has an active forum he can share. Seems (from my limited exposure to it) to be on the right track and worthwhile.
I’d participate, for sure, this is part of my world; but my role is in government affairs, public perception, and education… You all get these things built and meaningful, I’m swinging at the capital and lawmakers to make the economy better
This is one of the most grounded and necessary takes I’ve seen in a while. We’ve built an entire venture ecosystem obsessed with speed, not substance—and it’s failing the sectors that actually sustain life. The venture studio model resonates deeply. In fact, we’ve evolved into exactly that—co-founders in sectors where timelines are long, regulation is dense, and impact is physical.
This isn’t pitch theater. It’s systems change.
Let’s build accordingly.
Best articulation of the missing pieces in incubators and accelerators. Thanks, Paul O’Brien, for making the efforts to form it into an article with real advice outside the mainstream.
Tom Miller working on better distinguishing R&D / incubator / venture studio / accelerator … this has reinforced clearly that people use whatever word is en vogue, and they don’t realize that being inconsistent makes it harder for everyone to get involved, sponsor, or fund – because we have bad experiences with things that aren’t what they say they are.
I’ve been wanting to get a venture studio off the ground for years because I think this is the way, especially when we consider social impact. Everyone wants to run a nonprofit without an actual business model. Leatherback Labs, it’s name was designed to tackle social issues with technical solutions. I have all the know how and execution. Just lack the purse, right now.
Sheffie Robinson, MBA, PSM, CWDP, PMP® cracking the lack of capital is where my head is at because years into this, every city has coworking and accelerators now, they’re doing demo events… Nothing distinguishes them. Nothing, clearly, has moved the money to support them… Begging the question, why??
Paul O’Brien I think the issue is that policy doesn’t even know how to support innovation. Co-working and accelerators “look” like innovation even though it’s glorified executive offices. Those actually doing the work aren’t as visible so they don’t get the support, unfortunately. We need more venture studios actually solving problems. We have these for the DoD and that’s how they get funding. Maybe we need to do the same for the USDA or the DoE?
Love this clarity! After running a couple of incubation cohorts in green construction and affordable housing, we felt this 100%. Pivoted to a studio model – but the capital seems to chase the hackathons and challenges and 6 month incubator programs, with metrics like number of startups in a year !!
Stuthi Vijayaraghavan love that you added this because I’ve been talking about it with a couple dozen people since I wrote this…
Most sponsors (and governments) don’t give a damn about impact or outcomes. They care about perception and headlines.
A city will happily promote and celebrate a crappy coworking space that calls itself an accelerator, because they had “100” startups come through (and that’s great for the brochure of what they accomplished to make them sound like a startup city creating jobs!).
Nevermind that they all failed. Failure dies in obscurity and no one cares if it actually worked.
I think we need to collectively do a better job of calling out the junk Startup Development Organizations and refusing to allow the sake-of-appearances sponsors and local leaders, from even being involved in the ecosystem, because they’re causing harm under the appearance of good intentions. Find the people who measure success in terms of positive outcomes.
As one of the only hard-tech / physical industries focused venture building platform (that also focuses on IP vertical translation from labs / academia as part of our “LEGO bricks” approach I say to you…. Let’s build!!!!!!
Spot on. At Summit Studio Capital, we’re backing studios built for exactly this kind of work—where execution, not pitch decks, drives value. Tough Tech needs teams who know how to navigate regulation, infrastructure, and scale from day one.
Venture studios aren’t a nice-to-have in these sectors—they’re essential. Thank you Paul O’Brien for capturing it so clearly.
The problem is that the VS is really a true founder model. And so the methods/speed most of these studios operate at are very sub par and academic.
Corey Engel ooo go on
Founder model meaning?
Paul O’Brien founders should scale through creating the solid core functions of operations and growing through acquisition, deploying parallel teams, vertically integration etc. all can mimic the VS model.
Corey Engel agree with you! VC can work only and solely in “founder mode”. Founder as a Hero is donig 100% of job (sometimes together with a few co-f), VC is assessing and brings cash+network. Hero doesn’t need to standardise any of entrepreneurial function – on the contrary, hero’s core strength is uniqueness.
Venture studio is just the opposite model – in all the aspects of venture creating, building and funding processes.
that does sound sort of what were in building RegTech rails for fintech and supply chain tech.
funding is hard to get, industries dont want to change, but we are tackling real problems using tech to do so
Read through your post. Lots of quotable bits. for the record, Ive been using the phrase “tough tech” for years too. I thought that perhaps “deeptech” might be more understanable and better used, but I talked to a VC the other day who said he was in Deeptech and I asked him to clarify and he mentioned AI…. We need a word that states”. Research-backed science startups NOT in software).. or somehting.
In any case I agree with a lot of what you wrote, im working in Davis CA alongside the university focused on AgTech / Food / Sustainability. One advantage I have is that I already built the “lab” facilities over the last 8 years and am expanding now. If I didnt have that there would be a big gap in the plan here.
The one thing that I think is missing from your writing, which I think is central to my understanding of what we are building is “what is your local talent good at”. I dont think that if you build an incubator in rural salinas, you are going to have a team with the experience base to do every kind of startup. Even here in Davis where I have the worlds #1 Ag Unitversity… we are focusing on just those things where the local talent base is strong.
If you were in redmond WA you might build some .com startups, if you were near an intel campus… you might be more into semiconductors…. if you cant identify a unique talent pool that is the basis for innovation in your city… you are missing a big key to the puzzle I think. The “experience” advantage that studios bring I think clearly demands an industrial focus that is relevant to your talent base
my two bits…. Cheers!
Tim, very well said. A lot of my writing and economic development / policy work is already addressing the fact that startup cities only work when using the existing industry strengths – everyone trying to be “Silicon Valley 2.0” for more coders who can do anything is wasting their time.
Paul O’Brien, love this: “Studios flip that script: they start from the inside, align capital and capability from day one, and only spin out companies when they’re built to survive the regulatory gauntlet and supply chain chaos that define industrial transformation. In other words, this isn’t startup theater, it’s startup manufacturing.” But I would add one more important thing that you missed. The best venture studios have product-market fit built into their processes. I know at least one that does that, ours: Purdue DIAL Ventures. In fact, we are so confident in what we do in the studio process, our expection is that our companies have commitments from customers to help specify and buy the MVP before launch. In fact, one of the hurdles we require before we will fund our pre-seed companies (up to $1M) are LOI’s in hand where the customer is pledging this commitment.
This is the reality check the ecosystem needs. The real work isn’t in decks or demo days. It’s in operations, risk, and regulatory grit. Glad someone like Paul O’Brien calling it out.
Kevin Phillipson Robert Hanna This is the article I mentioned that describes building a venture studio.
Paul O’Brien spot on!
Look at all the comments! Hard tech folks feel seen here. Cheers to all the builders and makers.
I’ve been saying this for years; the venture studio model isn’t a trend, it’s a structural advantage.
Startups are too costly to leave to chance. Embedding experienced operators from day one doesn’t just de-risk; it accelerates clarity, traction, and execution.
Great perspective Paul O’Brien!
Keon Morning too costly to leave to chance. Great point
This is the kind of clarity the startup world desperately needs. As someone helping founders build the tech behind tough ventures at Peopleoid, this framework hits home. Too many overlook the ops, compliance, and real-world grit needed beyond pitch decks. Would love to connect and support any studio teams needing a strong dev partner.
Good thinking and good post. The physical studios are pretty much needed. But to be fair – wold’s economy is 30% physical goods and 60% services. So saying the physical goods are those that actually move the economy is not exactly right. But I’m with you on physical – a huge overlooked segment because it’s not as glamorous and “easy” as software.
Paul…just when disillusion was accepted and reconciled, your venture studio walks in.
The most powerful concept to have landed on my feed.
Lost count of how many we contacted, while we were already building.
Even now, most of the opinionated forums in this vertical, do not even acknowledge, leave alone connect.
Paul, we are in the last lap of our development, which has taken 4 years, all by ourselves.
We have filed our patents and are now just waiting for the proto to clear the toughest protocol.
Look forward to keep in touch.
Wish you all the best.
Venture studio needs to grow as quickly as it can.
For the same of impact innovation.
I didn’t realize I was building a venture studio – sounds like I am. Let’s talk!
Paul O’Brien I agree that cities benefit from venture studios—but I’d add that multi-generational family offices, when structured around principles of statesmanship and civic responsibility, often function as de facto venture studios for the regions where they originated. I’m actively building this model now.
Rather than focusing on raising outside capital, I believe it’s more strategic to cultivate long-term alignment, intergenerational trust, and embeddedness in the local ecosystem. When you study the performance and incentives of conventional venture funds—especially their timelines and capital constraints—they rarely support the type of patient, deeply place-based innovation that cities actually need.
Brandon Barney would love to talk because family offices COULD (and should) but most, I’ve found, don’t mean it seriously. They want to participate, not meaningfully.
Not a criticism of their intentions but it is a criticism recognizing that in fairness, they don’t know how… So they tend to take the easier way out by investing in funds. That’s a poor use of their capital, better directed to those of us that know what we’re doing with startups (which is not *most* VCs)
Paul O’Brien Totally agree — and that’s exactly my point.
The best family offices already did this: Carnegie, Rockefeller, Rothschild, even the Medicis in their time — they weren’t just capital allocators, they were venture studios for civilization. Universities, libraries, railroads, vaccines, even legal systems were seeded, structured, and scaled by these families. They built institutional infrastructure with generational patience.
The issue today isn’t intent, it’s amnesia.
Most modern family offices have forgotten (or never learned) how to operate at that level of civic statesmanship. They optimize for wealth preservation instead of institutional legacy creation — and default to VC fund LP positions as a shortcut. That’s not a bad impulse, but it’s incomplete.
I’m working on reviving this older model — where the family office is a venture studio in disguise, embedded in local ecosystems, compounding trust and innovation over decades. It takes training, governance design, and the right operator-partners… but it’s absolutely doable.
Brandon Barney love this. We should talk. Some if my partners have experience with similar setups including economic development and cash flow studio designs.
Yes, exactly- the future belongs to those who build in the mud, not just code in the cloud Paul O’Brien
Paul O’Brien I’m a product of the studio model, and agree with your thesis. But the objectives and expectations of the capital funding studio-launched businesses is a critical piece of the puzzle.
Studio does not necessarily equate to “smart” or “patient” capital. The LPs and operators of the studio have a huge impact on the positive or negative implications for graduate founders.
Geoff Bastow your take is pretty consistent with everyone else. Two take-aways that I’m studying and working on next:
1. Clarifying the business model
2. Clarifying existing sources of capital and then explaining what SHOULD be the sources of capital
Seems there is a lot of inconsistency in the first place. And everyone is struggling to raise capital — which, in my experience, is driven by the first case -> inconsistencies in words (venture studio or incubator?) and model keep capital withheld.
Geoff Bastow thanks for your comments and for being a critical part of Purdue DIAL Ventures for two studio cycles in a row. Go Windrow, Inc.!
Paul O’Brien — Alloy Partners (Formerly High Alpha Innovation) builds venture studios by convening corporations in a vertical so that we can not only launch startups, but “advantage” them with market access & early customers. We’ve built ventures in the built world with Purdue DIAL Ventures & WoodChuck.ai. If you’re really interested in seeing one of these come together, let’s talk.
cc Nick Wichert
I spent a few years exploring a hardware venture studio, first as a founder at the hardware design firm Ovyl then I exited to try independently at Sonora Lab. Ultimately I found that timing was not right, investors weren’t ready to back hardtech at this scale unless it was for defense, and if those obstacles could be overcome it seemed to be through connections – I didn’t have the network to raise the capital necessary. Which realistically is 10’s of millions for any hardware studio. I pivoted to building like a founder, 1 company at a time via a bootstrapped studio, Squarish. Launching Orbyt soon. If you wanna talk hardware venture studios I’m your guy I’d love to chat. Just ask Matthew Burris we started the venture studio journey together! I’m currently supporting a few other firms exploring hardtech concepts as well.
Capital is clearly the rub, which most would argue is always the case (but they’re wrong – in incubators, startups themselves, and even accelerators — that’s about experience). Tackling this next, in some interviews and an article in the work. I think the capital markets have it wrong.
Amit Bhakta Courtney M. Queen, Ph.D. Doug McIntyre, Ph.D. Douglas Peters We could build one of these in Abilene. Looks like a great fit. What do you think?
Jeff Mustin, J.D., M.B.A. I’d appreciate your thoughts on this, too.
Paul O’Brien I definitely want to follow up with you on this.
Michael Bob Starr I think Abilene is primed to create something like this! This concept flows nicely into the mission of the chamber imo.
Doug McIntyre, Ph.D. I agree 100%. Something like this would be a nice way to tie together all the local players.
Michael Bob Starr let’s get our group together and bat this around. This pulls in the entire community.
Paul O’Brien it has been a bit and definitely time to talk re studios!
It requires the co-founder mindset with skin in the game. We have created a full stack venture building platform from lab to deployment. Social Alpha
I am keen to hear out how i can join via Spaghetti Valley Startup House
A well funded and organized Studio with specific niches that aren’t encumbered by bureaucracies that take forever to get anything done should be the new norm.
I’ve seen so many try but yet they fail because they go too broad, they have no internal capital source and the studios themselves are underfunded which means that they can’t attract the best people to jump into the foxholes with these founders and be productive at the highest level.
Another big reason why I see them fail is because they pitch themselves as passive and not directly involved, like an incubator, and they dangle the carrot of money and “high level guidance”… never works.
A true studio has to be in complete control of the people, the process and the capital at all times or else it’s just another consulting service for equity or a value add VC.
Just my take having been in the industry for a few decades.
Jeff McDermott yes!! I just wrote about incubators …. You’re exactly right. We need to be more demanding of programs being what they say they are (or rather, properly defining themselves).
Most venture studios operate like incubators.
Hell, most “accelerators” are little more than coworking spaces, abusing the name to attract founders.
Down and dirty has a new meaning. Love the terms “Tough Tech” and “Venture Studio”. It’s time for IRL actions, not just deck and sales pitch.
“Universities can contribute IP and students. Industry partners must provide real-world pilot opportunities. Government and philanthropy fund early de-risking. But it all starts with a studio, not just hoping founders show up with the right plan.”
Where do I sign?
Tinny Widjaja, i totally feel your excitement. This sounds like a perfect match for innovation. What’s the first project on your list?
Regi McCabe-Gossett This is one of the articles I mentioned this afternoon.