Startups face several challenges but most people focus on just one and that’s the finances. Of course, it is important to take care of the finances otherwise you risk going under. Getting the necessary financial backup for your new business is essential and that’s why many founders and business owners are eager to secure funds. There are several ways to fund a business and one of the most common ways is through a Venture capitalist.
So what is a Venture Capitalist?
Venture Capitalists operate as investors, they see a promising business and then they back it up with funds. But there’s a reason why getting a venture capitalist backing is so difficult for founders and entrepreneurs alike. This is because most venture capitalists only part with their money when they see hard results. Without that, it’s not easy to convince any well meaning investor to fund your business. And even if you manage to get an investor to provide the funds, you still need access to resources. So what happens to a business that’s in the idea stage? Where do you get the resources needed to go from idea stage to product stage? This is where a Venture Builder comes in.
What is a Venture Builder?
(Source: Unsplash/@Volodymyr Hryshchenko)
A venture builder goes by many names. They are sometimes called Startup studios, Tech studios, Venture production studios or Startup Factories. But whatever name they go by, Venture builders operate a non-traditional business model that goes beyond simply funding other businesses. They provide a hands-on approach meaning that they are involved in the day to day running of the business. Venture builders don’t wait until they see hard results before committing to a business. Instead, they help nurture successful ideas through the different phases of its development. In essence, they are businesses that help in building other businesses. There are many startups that were groomed by venture builders into successful companies, the most notable ones are medium and Twitter.
Differences between a Venture capital and a Venture builder
The difference between a venture capital and a venture builder lies mostly in their business model. Venture capitals are more risk averse and are not operational organizations. Whereas Venture builders take more risk by leveraging on their own infrastructures to help small businesses grow. These could be by providing a co-working space, assisting in marketing, research, and providing network and connections. They also provide legal infrastructure, administration, Human Resources, branding, communication etc. While venture capitalists are focused on the return on investment (ROI), venture builders are focused on execution speed. They have the ability and resources to create and launch a minimum viable product (MVP), then use the feedback to learn more and adapt their product according to market expectations. Also, venture builders are in for the long haul. They are involved with the startup's processes for as long as it is necessary.
The advantage of using a venture builder
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Compared to venture capitalists, incubators or even accelerators, venture builders hold the biggest advantage. Most new entrepreneurs lack the experience, skill and resources needed to successfully run a company. They stand a lot to benefit from a venture builder since they can share resources. This makes it easy for a new business to focus on developing its idea into a product even if it doesn’t have the necessary infrastructure to launch or market the product. The partnership also gives new business time to grow and become more stable without losing momentum. That is they reach the point where they can hire their own staff and build their own team. This leverage is what matters the most.
Conclusion
Venture builders are the Uber and Airbnb of Startups. By providing a vast network of connections, they help new businesses take root and also nurture them.
With a pool of resources to draw from, new businesses can effectively compete with more established firms and even scale up as quickly as possible. There’s no doubt that the venture builders model fosters industrialization.
Epirus Ventures is focused on empowering entrepreneurs and founders with not just the means (finance) but also the connection (network) and resources (legal, human and intellectual) they need to become successful. To learn more about us, check out our website and if you have any questions please feel free to contact us. We’d love to here from you.
