Venture studios are transforming the startup ecosystem with their unique approach to company building—one that combines funding, hands-on support, and structured execution. A recent in-depth analysis from the Big Venture Studio Research 2024 (Authors: Maksim Malyy, PhD; Max Pog & Contributors) illuminates the key success factors in this model. We, at Mandalore Partners, analyzed the latest findings, revealing both the strengths and challenges of venture studios today.
In Short:
Venture studios are redefining startup creation by combining funding, hands-on support, and structured execution. They typically invest $130,000 for 17% equity, positioning themselves between accelerators and VC funds. However, success is elusive, 76% of startups fail, and exits take over seven years on average. Key success factors include experienced founders, strategic use of Entrepreneurs in Residence (EIRs), and efficient MVP development. Studios that combine consulting services with startup-building and maintain lower equity stakes outperform pure-play models. Ultimately, studios follow two paths: stable, predictable growth or high-risk, disruptive innovation. The future of venture studios depends on mastering this balance.
A Standardized Model Focused on Startup Building
Modern venture studios operate under a distinct framework. Most follow a pure-play model, focusing exclusively on launching startups rather than diversifying into corporate partnerships or fund management. While typically sector-agnostic, they commonly operate in Health, B2B SaaS, Fintech, and Sustainability. The venture studio boom centers primarily in the US and Europe, with most adopting a single studio model—operating without an associated VC fund backing.
Venture Studios Invest Early for Meaningful Equity
Venture studios typically invest an average of $130,000 per startup for 17% equity, acting as active, early-stage investors. Their startups begin with a pre-seed valuation of $1.09 million, positioning them between accelerators and traditional venture capital funds. This investment level secures a meaningful stake while preserving room for future investors.
High Failure Rates and Long Exit Timelines Define the Game
Despite their support structure, venture studios face significant challenges. They see a 24% exit to 76% failure ratio—meaning three of four studio-backed startups fail. Let’s be precise on that point: success here was defined as any startup that did not go bankrupt.
Exits take time, averaging 7.11 years, typically through VC exit. The process is highly selective: studios review 200 ideas, develop 40 MVPs, yet only one reaches an exit - an exit was defined here as any occurrence of a liquidity event, quite a broad definition. Adding to these challenges is a negative valuation growth trend - obviously negative as 76% of startups fail - with startups losing an average of -$0.14 million per year in value, when VC funds are at -$0.12 million per year.
Support Services are common, but Market Execution is Key
Entrepreneurs in Residence are vital to venture studio success, contributing during the early ideation phase or during the creation phase. Leading studios offer comprehensive support services: advisors and go-to-market (GTM) assistance appear in 91% of studios, while operational and technical development support exists in more than 80%. Over 70% of studios provide access to first customers and financial resources. Yet despite these advantages, negative valuation growth indicates that strong operational support alone isn't sufficient—market execution remains crucial.
Hybrid Studios See Higher Survival Rates
Success varies significantly among venture studios. Those combining consulting or corporate services with startup-building achieve an impressive survival ratio, outperforming pure-play studios. Studios being vertical agnostic achieve a 19% success rate.
Scale significantly influences success. Studios launching between four and seven ventures yearly outperform those with lower output. At 30 ventures or more, success rates climb, highlighting the importance of operational experience and network effects. Equity structure also matters—studios keeping less than 20% equity achieve the highest success rates at 33%, likely by leaving adequate room for future investors.
Founder experience proves crucial. Studios recruiting founders with previous startup exits show better outcomes. Timing of EIR integration is also key—69% of studios with successful exits brought in EIRs during the creation phase, versus 46% among those without exits. This suggests that well-timed entrepreneurial leadership significantly impacts scaling and funding success.
Efficient MVP Development Increases Startup Survival
Product development efficiency strongly indicates success potential. Studios keeping MVP development costs under $50,000 achieve a 15% success rate, demonstrating lean development's advantages. Time of execution matters—MVPs launched within six to twelve months achieve a 21% success rate, higher than those launched in less than six months. Studios delivering fully functional, market-ready MVPs rather than prototypes reach 19% success rates, emphasizing the importance of quality execution.
Two Roads Diverge: Play It Safe or Go All In on Disruption
Research reveals two distinct strategic approaches. The first strategy prioritizes stable returns, focusing on predictable growth over high-risk bets. These studios target sustainable business creation through corporate focus or steady niche market growth. This approach offers lower but more predictable returns, suiting new studios without significant competitive advantages.
The second strategy embraces disruption and high-risk ventures, aiming to create breakthrough companies through cutting-edge technology, innovative business models, or exceptional talent. While offering potential for massive returns, this path carries a high failure rate and demands unique competitive advantages. Research suggests newcomers should start with the stable returns strategy before attempting disruptive startups.
The Future of Venture Studios Lies in Execution and Adaptation
The data presents clear insights into venture studio evolution and success factors. Despite high failure rates and valuation challenges, top performers follow consistent patterns. Studios that combine startup building with consulting services, maintain low equity stakes, develop MVPs efficiently, and integrate experienced founders strategically consistently outperform peers.
For investors and entrepreneurs, this research provides a clear framework for evaluating venture studio opportunities in 2025 and beyond. With strategic execution, venture studios can continue revolutionizing the startup ecosystem. The key question remains: who will master this model and shape the next generation of successful startups?
