Startup studios that created billions in value

(volodarik.com)

61 points | by lemoneyeo 10 days ago

8 comments

  • happyllama 10 days ago
    You are missing out the OG #1 venture fund / studio: Sutter Hill Ventures - https://kwokchain.com/2020/09/22/the-mike-speiser-incubation...

    Success rate is a helpful metric, but it depends on which player/party is interacting with the Studio. Studios lend themselves well to Consumer fields which traditionally have lower exit multiples than B2B/Infra/Software.

    - Are you an LP? You can have great paper returns, but poor DPI over time. How do you feel being an LP not seeing that GP's are double dipping on equity grants at company formation for them to only secondary as fast as possible after a quick markup (easier done in the last few years in zero interest rate environment) arguably breaching fiduciary responsibility?

    - Are you a "Founder" getting hosed on equity? You do receive a ton of support and resources, but you're paying with the most expensive cost of capital (equity). Do you have full control of the company? What are the voting rights of your stock grants? Where does the buck truly stop?

    - Are you an early stage employee getting a sliver of the already somewhat upside down cap-table?

  • todsacerdoti 10 days ago
    I don’t know where the author got his success rate data but as an LP I can confirm the data is wildly inaccurate.
    • lemoneyeo 10 days ago
      Hey, I got it from public resources, nothing made up. Can you, please, share what studio did I get wrong?
      • RC_ITR 10 days ago
        Going to Idealab's Pitchbook page: 202 investments, 135 'exits' (I think this is where you get your 65% number), but 65 of those 135 'exits' were bankruptcy.
      • joedevon 10 days ago
        I'm skeptical as well though willing to listen.

        Which public resources? I didn't see any references cited.

        It's pretty common in the startup space to exaggerate, but even a reference to a studio's own stats would at least be a good start.

        • lemoneyeo 10 days ago
          I didn't think it's important, but will add the resources to the article. Thanks for the feedback.
    • searchableguy 10 days ago
      Do founders actually retain more equity in startup studio model as mentioned in the post?

      Isn't founder in such a place just another employee?

      • lemoneyeo 10 days ago
        I saw 2 types of studios - that incubate their own ideas and bring founders to operate them. Here founders don't have the large stake, but it's not their idea and resources - that bring outside founders with ideas. Here founders retain big part of equity.
  • marban 10 days ago
    I've sold three startups to Idealab and worked with Bill for almost two decades. He's the real OG of Incubators. Also, here's a nice playlist of his lessons: https://www.youtube.com/playlist?list=PLeabOFsFccYCkD9ZUsoI0...
    • efnx 10 days ago
      Can you elaborate on your process of starting, developing and selling?
  • monkeydust 10 days ago
    Related recent post on this topic - https://news.ycombinator.com/item?id=34414215
    • lemoneyeo 10 days ago
      Great find. Thanks for sharing.
  • fairity 10 days ago
    I'd be super curious to get the entire list of studios that the author looked at for analysis. Max Levchin's studio HVF labs birthed Affirm, which isn't included.
  • thyagobr 10 days ago
    Funny to see Betaworks on the top and High Alpha on the bottom xD
  • havefunbesafe 10 days ago
    The problem with startup studios is attention is completely splintered. I think Lemon.io (your company) is probably the only way to get quick validation and then drill down.
    • lemoneyeo 10 days ago
      haha, thanks. Lack of focus is the biggest constraint, true.

      Also, I think it's better to validate with in-house talent, even though I see a lot of MVP built through us.

  • ilrwbwrkhv 10 days ago
    These are not very popular in the US. I wonder why.
    • lemoneyeo 10 days ago
      It requires a lot of capital. Most of them fail. One of the startup studio founders told me it's hard to fundraise for the studio even if you are successful