How to build a successful venture studio: The why

A corporate venture studio is a business unit within a larger corporation dedicated to creating and exploring new business opportunities, primarily by incubating new ventures and startups. Building a venture studio is a way for organizations to accelerate growth, boost revenue, and stay competitive. However, the advantages of establishing such a unit go beyond just these goals. In fact, there are several reasons why your firm should consider establishing a venture studio of your own.

Innovation

A venture studio can serve as a way for a corporation to explore new ideas and technologies that may not fit within its existing business model, but with the potential to yield significant benefits in the future. Keep competition at one arm’s length with your own venture studio.

Talent development

Furthermore, a venture studio can provide opportunities for employees to develop new skills and take on leadership roles in a startup environment. This can help to both retain and attract top talent within the company.

Unfair advantage

New corporate ventures can benefit from assets and advantages such as access to existing customers, sourcing or distribution channels, partnerships, industry knowledge and financial investments. These corporate assets are a source of “unfair” competitive advantage compared to independent startups.

Access to external resources

Building corporate ventures is also a great way to access new resources and networks outside of the existing organization, including external funding, entrepreneurial talent, new relations and partnerships, and expanded customer bases.

Revenue generation

Last but not least, a successful venture studio can generate significant revenue for a corporation through the sale or IPO of its portfolio companies, or by spinning them back into the core organization to yield new revenue streams.

After all, a corporate startup has a higher probability of success compared to an independently founded startup. According to Chris Zook of Bain & Company there is a 1-in-8 chance of creating a viable, large-scale new business generating over $100 million in revenue through this approach, compared to a 1-in-500 chance ​when starting from scratch.