For any would-be founders who are considering finding a ‘venture studio’ to apply to after reading the post, beware of this:
Lately many dev agencies have been repositioning themselves as ‘venture studios’ as a way of differentiating themselves from the plethora of generic agencies out there.
These agencies don’t develop ideas or de-risk anything (despite their claims). Rather, they will build your idea in exchange for fees and a significant chunk of equity under the guise of being a ‘venture studio.’
They have you ‘apply’ with your idea and then give you a proposal to build it for a mix of cash and equity. In reality it’s just another dev agency under the guise of a hip new ‘venture studio.’
I’ve seen proposals asking for six figures in dev fees upfront plus upwards of 40% in equity. And I’ve seen founders actually take those deals out of desperation to play the startup game.
They often target first time, non-technical founders who have extensive domain expertise and networks, although they also go after younger talent.
One owner of a ‘venture studio’ near me even took a job as an adjunct professor so he could take advantage of early talent with crappy deals before they get their bearings in the real world.
Not to discredit actual venture studios because I think it’s an interesting concept that has shown some success, but just beware of dev agencies trying to capitalize on the cool new thing by simply rebranding themselves as a studio…
If anything, this is how a good dev agency business model should have always looked like. I am not sure the thing you described is likely to actually work, but if it can work, it's fantastic.
> I’ve seen proposals asking for six figures in dev fees upfront plus upwards of 40% in equity. And I’ve seen founders actually take those deals out of desperation to play the startup game. They often target first time, non-technical founders who have extensive domain expertise and networks, although they also go after younger talent.
Is this a bad thing? These founders bring value to the table but have no ability to build product, or to identify a technical cofounder who can. Seems like 60% is reasonable for them to own to get a team that can ship.
Lately many dev agencies have been repositioning themselves as ‘venture studios’ as a way of differentiating themselves from the plethora of generic agencies out there.
These agencies don’t develop ideas or de-risk anything (despite their claims). Rather, they will build your idea in exchange for fees and a significant chunk of equity under the guise of being a ‘venture studio.’
They have you ‘apply’ with your idea and then give you a proposal to build it for a mix of cash and equity. In reality it’s just another dev agency under the guise of a hip new ‘venture studio.’
I’ve seen proposals asking for six figures in dev fees upfront plus upwards of 40% in equity. And I’ve seen founders actually take those deals out of desperation to play the startup game.
They often target first time, non-technical founders who have extensive domain expertise and networks, although they also go after younger talent.
One owner of a ‘venture studio’ near me even took a job as an adjunct professor so he could take advantage of early talent with crappy deals before they get their bearings in the real world.
Not to discredit actual venture studios because I think it’s an interesting concept that has shown some success, but just beware of dev agencies trying to capitalize on the cool new thing by simply rebranding themselves as a studio…