Our last article on the rise of the Venture Studios spurred a few questions in my DM from those looking to move to venture studios around the globe yet finding it tricky to pin down the studio structure by itself and the role they could play in it. Nonstandard in terms of its structures, studios tend to have multiple components to it. I invite you to think of it as the layers of:
- Partners, who compose the core team. They could be focused on fundraising, communications, marketing, finance, recruitment etc, all composing a shared resource available to the ventures from within the studio.
- The Venture Leads or EiRs (entrepreneurs-in-residence), working on discovering, validating and scaling the new ideas coming from within the studio.
- The supportive network of go-to resources (freelancers, investors, and selected firms).
Let us double click on a highly debated, fluidly defined, very challenging, and always necessary role of the Venture Lead (or EiR). This is, perhaps, the most necessary piece of the puzzle in the studio model. In essence, the role is of a moving CEO who is industry agnostic, passionate about building 0-1, constantly learning, product-oriented, well connected to marketing, operations, customer service, who is both hands-on and strategic, and importantly – self-motivated – a breed of talent that is so unique and rare as unicorns themselves. This is the magic source that drives the ventures forward on a proven set of rails, and, potentially, is the reason why studios produce 5x unicorns compared to classic VCs.
“Venture Architects carry the tall order of defining the field of opportunity and scope of our ventures. They wear many hats and must develop the marketing, pricing, and operational structures needed to commercialize new products and businesses. As project leaders, they manage ventures from beginning to end, and may even transition to running these new businesses in the market. “ – BCG DV
Venture Lead/ EiR role in the studio
Usually, Venture Leads are brought in before the permanent team is hired with a view to migrating from one startup idea to another from the portfolio of the ideas in the studio itself. That way the knowledge of processes, people, and the flow is perfected with each venture and enables a faster journey to seed.
Those planning to take on this challenging role might be interested in this caution: with the psychological safety net of knowing that there will be another startup you can migrate to, the VL can lose the necessary fear of failure and the immense drive to reach the land of tomorrow. Survival of the venture and reaching net revenue is a primary and overarching milestone of any entrepreneur. Safe havens are not always a good idea as those remove the urgency. One idea on how to combat this and make sure you as a VL keep aligned with the KPIs and timelines is to reward the VL with the equity of the successfully launched startup. Nearly every studio operates with a clear cut-off point for each venture, so your specific outcomes to be achieved are clearly organized on the timeframe, helping you not only to get to “no” faster but to zoom in on the ideas that have true potential.
Accountability over outcomes and defined roles & responsibilities are essential to reach results. Depending on the model of your studio, make sure that you are giving enough space to allow the VL to be accountable for their choices. Without clear ownership, their influence over the outcome is under question. Active management and advisory hold two different levers of action, so if you are giving the long rains to the VL, make sure they have the space to gallop.
Example Venture Lead profile
Responsibilities & Experience :
- Research companies, industries, and business models,
- Run independently with specific investment opportunities and sector themes.
- Understand what kind of teams and companies have the potential to be next-generation tech successes and great investment opportunities.
- Produce investment committee materials (presentations and financial models).
- Lead the team in selected ventures from idea generation to launch, lead product, financial, marketing, operations, and strategy with the support of the expert network
- Analytical skills; can develop financial models, unit metrics, quickly evaluate financials/P&L, build forecasting models with various scenarios.
- Communication skills; can effectively and succinctly communicate findings and conclusions
- Strong intellect; with a degree in business, management, technology or finance.
- Project Management experience; through operational experience from a startup, VC, management consulting company or equivalent.
- Passionate builder
- Curious about disruptive technologies, companies, business models, people, and ways to create sustainable value.
- Genuinely interested in understanding the challenges that entrepreneurs in tech startups are facing.
- Informal and collaborative in team constellations, always ready to roll up your sleeves when needed.
Venture building is an exhausting process that you can only have the energy to go through that many times as a venture lead, and yet that is a perfect role for most diverse profiles to flourish in.
Those considering to embark on the journey might appreciate the flexibility of a smooth “exit” from the studio into the startup they created and like the most from their portfolio.
PS Feeling this is a good time to join a studio? Get in touch or send your recommendation to NOMU VC team on email@example.com