What is a venture studio? How startup studios work in Europe

What a venture studio (startup studio) is, how it builds companies, how much equity it takes, how it differs from accelerators, and examples from Europe.

A venture studio, also called a startup studio or company builder, is an organisation that starts companies itself. It comes up with ideas and tests them, recruits the founders, and provides the first team and capital. In return it takes a large founding stake. Accelerators and incubators work with startups that already exist, while a studio builds new ones from scratch, often several at once.

Europe has some of the best-known examples of the model, including Hexa (formerly eFounders) in France, the company builder Rocket Internet in Berlin, and Founders Factory in London. This guide explains how studios work, how much equity they usually take and what founders should check before joining one.

How a venture studio works

Most studios run a similar process, although each one names the stages differently.

1. Ideation. The studio team, sometimes with corporate partners, looks for problems worth solving, often in sectors the studio already knows well.
2. Validation. The team tests demand by interviewing potential customers and building prototypes or a minimum viable product. Ideas that fail these tests are dropped early and cheaply.
3. Team building. The studio recruits a CEO and co-founders for the ideas that pass, often people who join as entrepreneurs in residence.
4. Spin-out. The new company is incorporated, and founders, the studio and an employee option pool share the equity. The studio usually puts in the first money.
5. Scaling. The studio's shared staff (product, engineering, design, legal, finance and recruitment) support the company until it can raise outside funding and hire its own team.

Hexa describes this support in three phases on its website: Start (0 to 1), Sprint (1 to 10) and Scale (10 to 100). It says an in-house team of more than 30 specialists works across these phases.

How much equity does a venture studio take?

Studios take much larger stakes than accelerators, because they supply the idea, the early team and the first capital. The most widely quoted figures come from the Global Startup Studio Network (GSSN), an industry association. In a 2020 white paper, GSSN reported that, when a company is founded:

• the average studio takes roughly 34% of the equity;
• the highest stakes are around 80% and the lowest around 15%;
• in GSSN's example, a single founder holds 50%, and the rest goes into the employee option pool.

These numbers come from GSSN's own survey of studio startups. Treat them as a rough guide, not a market standard. Terms vary a lot, and a studio that only provides capital and office space should ask for much less than one that builds the product with you.

Venture studio vs accelerator vs incubator

The three are often mixed up, but they differ in when they get involved and how much work they do.

• Venture studio. Starts companies from zero, usually from its own ideas. It hires or matches the founders, provides an operating team and early capital, and takes a founding-level stake.
• Accelerator. Runs fixed-term programmes, usually for cohorts of existing startups. It offers mentoring, investor contacts and a small investment for a minority stake, and the programme ends with a demo day or investor event.
• Incubator. Gives early teams workspace, advice and a community, often without a fixed timeline. Many incubators are run by universities, cities or corporates and take little or no equity.

Some organisations do more than one of these. Founders Factory, for example, runs a venture studio that co-founds new companies and an accelerator for pre-seed and seed startups, according to its website.

Types of venture studio in Europe

Independent studios

Independent studios are funded by their founders and outside investors, and they build companies in areas they choose themselves. Hexa started in 2011 and describes itself as a studio building software companies. Its portfolio includes Front, Aircall and Spendesk, and it says it has launched more than 50 companies, three of them worth over $1 billion, with 12 exits. In 2023 its co-founder and CEO, Thibaud Elziere, told TechCrunch that Hexa keeps 30% of the equity after the seed round, and that part of that stake is now allocated to the founder of the relevant studio within the group.

Corporate-backed studios

Corporate-backed studios build companies with large firms that supply data, distribution and pilot customers. Founders Factory runs accelerator programmes with corporates such as Aviva, Rio Tinto and HSBC, and says it has backed more than 500 startups.

Company builders

Company builders launch many businesses quickly, often by adapting proven models to new markets. Rocket Internet was founded in Berlin in 2007 by Marc, Oliver and Alexander Samwer. Its best-known company is the fashion retailer Zalando, set up in 2008, according to Wikipedia's summary of the company's history. Copying business models that already worked elsewhere made the approach fast, but it also drew criticism.

Thematic and deep-tech studios

Thematic and deep-tech studios focus on one sector, such as fintech, health or AI. Many work with universities or research labs to turn their results into companies. Some larger studios run several sector studios at once. In 2023, TechCrunch described Hexa, which used to be called eFounders, as an umbrella for separate studios covering future-of-work software, web3 and fintech.

We follow studios and the companies they launch in our Studios section.

Do studio startups do better?

GSSN's white paper reports these figures for studio startups:

• 84% raise a seed round;
• 72% of those go on from seed to Series A, compared with 42% for traditional startups in the data it cites;
• on average, studio startups take 10.7 months from founding to seed, and 14.5 months from seed to Series A.

These figures come from a 2020 paper by an association that promotes studios. Its studio data draw on GSSN's own survey of 258 studio startups, and the 42% comparison comes from older Crunchbase data. We are not aware of an independent European dataset that tests these claims, so they should not be read as proof that the model performs better. The same paper also acknowledges that some investors are wary of cap tables that do not look standard, which is a real trade-off of the studio model.

Pros and cons for founders

Advantages:

• you start with an idea that has already been tested and with money in the bank;
• legal, finance, recruitment and design work is shared, so the team can focus on product and customers;
• the studio's network can help with the first hires, customers and investors.

Disadvantages:

• the founding team owns a smaller share of the company;
• you may have less say over the original idea and early strategic decisions;
• later investors may question a large studio stake if it does not match how much the studio still contributes.

Questions to ask before joining a studio

• What exactly does the studio provide, for how long and at what cost?
• How is equity split between the studio, the founders and the option pool, and how does founder equity vest?
• Will the studio invest in later rounds, and does it have special rights such as board seats, vetoes or pre-emption rights?
• What happens to the company if the studio's support ends or the founder leaves?
• Can you talk to founders of the studio's past companies, including ones that failed?

For examples of how European founders made these choices, see our founder profiles.

Frequently asked questions

What is the difference between a venture studio and a VC fund?

A VC fund invests in companies that founders have already started and usually takes a minority stake. A venture studio creates the company itself, provides the first team and capital, and owns a founding-level share.

How much equity does a venture studio take?

A 2020 survey by the Global Startup Studio Network found that studios take about 34% on average at founding. Stakes ranged from about 15% to about 80%. Actual terms depend on how much the studio contributes.

Is a venture studio the same as an incubator?

No. An incubator supports teams that already have an idea, mostly with workspace and advice, and often takes little or no equity. A studio comes up with the idea, builds the company and takes a much larger stake.

Can I bring my own idea to a venture studio?

Some studios only build their own ideas, while others co-found companies with outside entrepreneurs. Founders Factory, for example, says its studio co-founds companies with entrepreneurs and partners. Check each studio's founder or entrepreneur-in-residence page.

What are some well-known venture studios in Europe?

Well-known examples include Hexa (formerly eFounders), whose portfolio includes Front, Aircall and Spendesk; Founders Factory in London; and Rocket Internet in Berlin, the company builder behind Zalando.