Venture builders are a new type of entrepreneurial ecosystem that is de-risking entrepreneurship and investment. By providing resources, mentorship, and access to capital, venture builders are helping entrepreneurs build great companies. We’ll be exploring what venture builders are, how they’re different from traditional incubators and accelerators, and why they’re gaining popularity.
What is a venture builder?
A venture builder builds, launches, and scales new ventures. Unlike a traditional accelerator, which typically mentors businesses for a short period of time and will take a fee or a minority portion of equity. A venture builder invests in the team, the idea, and the market opportunity, and then provides the resources needed to bring the product to market. Essentially a Venture Builders is an outsourced co-founding team.
Venture builders typically have a team of experienced entrepreneurs, engineers, and marketers who work closely with the founder to validate the idea, build the product, and launch the company. The venture builder model is becoming increasingly popular as it allows start-ups to move quickly and efficiently from idea to market.
Venture builder support for start-ups may include, but not limited to, the following:
– Legal support
– Marketing and sales support
– Software and hardware development
– Financial management, and forecasting support
– Mentoring
– ERM support
– Funding
– Office space
Investment returns of a venture builder
There is concentration risk in investing in a lone start-up which is direct angel investing. A venture builder is gaining traction as an alternative to direct angel investing as it allows for a diversified investment portfolio and experienced entrepreneurs can mentor and advise businesses on the best way to approach their growth.
Venture builders are a relatively new type of investment opportunity that is gaining popularity in the equity capital markets and is being seen as an alternative to traditional Venture Capital Funds due to the nature of hands-on experience in the Venture builders’ team.
Venture builders have been renowned for producing higher than average investment returns due to the increased survival rate of start-ups get with having the fund being operationally involved in the growth of a start-up, as illustrated below:
The Inc Magazine (2021), From Idea to Company: The Venture Studio Way [online] https://theincmagazine.com/from-idea-to-company-the-venture-studio-way
Investors are considering venture builders as a hedged investment vehicle to invest in start-ups.
Working together: investing in venture builders
Venture builder founders are typically a team of experienced entrepreneurs, developers, and operations specialists who work together to build new companies from scratch.
There are a few key reasons why you should consider investing in a venture builder, specifically:
First, venture builders have a proven track record of success. The founding team has successfully launched and scaled start-ups, so the team knows what it takes to build a successful company.
Second, you can diversify your portfolio by investing in a venture builder. This diversification can help buffer your portfolio against the volatility of the start-up market.
Third, you’ll have access to a team of experienced professionals who can help you launch and grow your diversified portfolio.
In conclusion, venture builders are an attractive option for investors who want to de-risk their investment in entrepreneurship. By investing in a venture builder, investors can reduce their exposure to the risks inherent in early-stage businesses. In addition, venture builders provide a supportive environment for entrepreneurs, which can help them build successful businesses.