How we built a Venture Studio (without raising a fund)

In early 2022, I was asked to join a young project. In 2024, we had built up an investor group for investing along our venture studio model. In the two years between, v

Here's how it started

It started when I was introduced to the founder and his early-stage idea. The other founders had left, mainly because they wanted to build everything at once instead of solving one problem first.

The original founder dreamt of building a two-sided B2B marketplace where startups and agencies could work together using service-for-equity models, which is as technical as it sounds.

Entering as a co-founder at a later stage, my main responsibilities were Sales & Marketing. Our initial objective was to step back and determine the market suitability for this marketplace. I demonstrated that the current idea did not work. As a result, we shifted the concept from a marketplace to a more service-based, venture studio style agency model.

But a venture studio usually needs funds to invest in the startups they work with; otherwise, it is just an agency.

We did not have a fund.

So we saw four options:

1. We start fundraising and build up a proper fund

2. We create a model, which does not need us to raise funds

3. We pivot away from needing a fund and do just agency work

4. We let the whole thing go and pursue other ventures.

We decided to try number 2. And after some tinkering, we started a business angel club.

In other words, a separate organisation. We decided to go with an interest based group, thus, a non profit club that organises events to their members, which are interested in our niche, have money, and invest on their own with us providing the investment opportunities and funding vehicle.

This has obviously a few complications and benefits. The benefit of a non profit organisation is that you do not handle money, which means we don't need an expensive licence from the state, sucha as FINMA/SEC or whatever they are called.

The downside was, that as a non profit, we also were limited to how we can pay ourselvers for the work that we did.

Picking a niche

If you want people to invest with you, you have to demonstrate expertise. Knowledge about one specific thing you focus on, not just as a person but also with your company. If you want to entertain people to join a club and invest, even more so.

We picked a niche, and doubled down. Literally.

We created reports on the market, market assessments and insigts, and we shared them for free to create a contact list, fast.

We created deep-read insights style of blog series around the topic, which we biweekly spread, to positition ourselves as thought leaders in the space. We worked as jury on pitching competitions, spoke on congresses and so on.

It took a year to even get started, and another year until we got really noticed. But it was worth it. Trust is built over the long term, after all.

Get the right team.

When talking about money, "white hair privilege" is real. As a 30-something wanting to convince people who have never invested before to give you money in a traditional and slow-developing industry, you may face serious uphill battles.

Our solution was to having a mentor, co-initiator, ambassador join us, and were able to have them join us as co-founder. Someone, who vouches for the system. They do not provide operational work, but that's okay, we do that. They receive equity because they bring a specific network and decades of knowledge to the table.

Finding business angels in a niche is not easy, so their network greatly benefits the start.

The second invaluable asset we needed was a lawyer. Having someone on the team who speaks dealflow in legal terms is incredibly powerful. If you start a vehicle, every document must pass through your lawyer initially. Over time, your communication will be standardized, reducing this need. However, every deal needs a seal of approval.

Having a lawyer on the team will save you a lot of money. Time, not so much, because it won't be their main job, so your stuff comes after their tasks. They will also not do operational work, that is ok. Their word is worth so much more to our clients that you can display a founding team that covers the most crucial skills necessary to run said vehicle.

Thus, we can live with having to wait for our lawyer to read and work throught documents.

What was left was Choosing the funding vehicle

After having survived all the trials leading to the first deal, you will have to think about the best way to actually do the deals, operationally.

Are you crowd-investing, crowd-funding, are the people investing directly or is there an intermediary and if so, how, what is their role, who is the deal manager and what are their terms, what platform do you use and so on.

In short, we decided to syndicate the deals. In other words, we bundle the investors so the startup has only one investor on their cap table and not 25 individual small-ticket private investors.

Basically, we created a club of people that are interested and invest directly into the presented cases. Therefore, no money flows into the organisation.

I will elaborate more on what a syndicate is, how we made it work and how we created our partner ecosystem another day.

Thanks for your time.

Cya round