When the term “unicorn” was first introduced in 2013, billion-dollar valuations were extremely rare. Today, even though there are over 1,200 active unicorns in the world, only 1% of VC-backed startups become unicorns like Uber, Airbnb and Slack. Startups still face a staggering 90% failure rate and the pursuit of unicorn-potential ventures remains a high-stakes gamble for investors.
In the past years, we have witnessed the rise of Venture Studios – a novel model for entrepreneurship and innovation that has proven to radically improve the odds of startup survival and startup success. Where with traditional models 75% of startups struggle to return cash to investors, 72% of startups built by Venture Studio successfully go through the early-stages and reach Series A.
Venture Studios don’t need to build unicorns to return their funds. Instead, they focus on the whole portfolio success and build companies that bring substantial returns, scalable growth and higher success rate than traditional unicorn companies – the dragons.
So, what makes Venture Studios better at improving the chances of early-stage startups success?
1. Venture Studios are all about speed
Venture Studios are all about speed. No two Venture Studios are the same, but all Venture Studios aim to get an idea from zero to scale as quickly and successfully as possible by employing a combination of repeatable venture building methodologies, funding and resources.
According to Global Startup Studio Network, startups coming from Venture Studios successfully reach Series A in 25,2 months compared to 56 months for traditional startups.
2. Venture Studios de-risk the early stages through proven repeatable processes
Venture Studios operate differently than incubators, accelerators or VC models. They act as co-founders and get involved in day-to-day operations to safeguard success through hands-on support and strategic guidance. Proven repeatable processes, playbooks and domain experts embedded in the teams eliminate critical mistakes early-on, speed up time to market and lower the risks.
3. Venture Studios focus on entire portfolio success
How it typically works for Venture Studios is that out of 10 portfolio startups, 8-9 become dragons. Studio-built companies don’t fail, instead they pivot, adding up to further minimizing capital waste or loss.