Bootstrapping a Venture Studio: The reality behind the dream
When I recently left my CTO role to start a venture studio, I was met with a few different reactions; “Amazing! What’s a venture studio?”, “How will you afford that?” and, “Oh god, what have you done now!?”
Welcome to a look inside building a venture studio, where I’ll answer these questions and more.
I’ve previously spoken about this at length, but in case you hadn’t heard, I started a venture studio as my own way of helping put Welsh tech on the global stage. Over the past decade or so, I’ve developed a ton of useful skills around building companies, products and engineering at scale. The venture studio offers a way to experiment with different ideas, in the hope of creating interesting companies. To inspire the next generation, the people of Wales need to see that it’s possible to build valuable and successful tech companies in Wales.
For the uninitiated, the term venture studio might not mean an awful lot. Simply put, venture studios are organisations that create startups. They exist to generate, develop and scale multiple companies, often at the same time, or in succession. The venture studio is deeply involved in ideation, validation, product development and market entry, providing support to these early companies operationally and (usually) financially. Depending on the configuration of the venture studio, the companies might be formed in an accelerator/incubator style, acting as a joint venture with external founders. It’s also possible that the companies could be wholly created and owned by the venture studio themselves. I will cover this topic in more detail in a future blog post, as it deserves its own commentary.
Some purists argue that without a massive fund behind you, you’re just an agency masquerading as a studio. I disagree. Life and business are rarely that black and white.
What happens when a studio creates its own IP and does client work to keep the lights on? I call that smart business. I’m lucky enough to have capital to start, but I’m not throwing VC money at a hundred bets hoping one pays off. I’m bootstrapping. And to make that work, I need a financial model that blends service revenue with product creation.
And that’s the thing. Many of these bets may never pay off. Even if they do, it’ll be many months, to years down the road, where there’s predictable recurring revenue or a lump sum from an exit. Building a venture studio is not a profitable business in the early days.
So, “how do you afford this?” To make this work, I have to be smarter. I need to get creative and find a financial model that works for a bootstrapped venture studio.
When I speak with other founders in my circle who have also chosen to bootstrap, there’s a common theme. It’s entirely acceptable to earn money through other means while you’re trying to make your main gig happen. Many tech founders sell projects, contract or advisory work whilst they’re trying to get their product off the ground. Makes sense, right? Just make sure that you don’t get too distracted.
I’ve had quite an eclectic career so far, working as a research assistant, UX designer, software engineer, VP engineering, CTO and even starting my own clothing company. I have a BSc and a PhD. Surely all of that puts me in good stead to find contract work in at least one of those areas?
It’s still early days. While I’ve had some success, my goal is to secure a dedicated 30-50% FTE contract. This allows me to bring high-level technical leadership to a partner organisation while funding the studio’s growth.
If you are looking for world-class technical talent or advisory support, let’s chat.
Perhaps this is a good time to reflect on the ultimate question, “Oh god, what have you done now!?” I often ask myself the same thing. I left a paid executive position to earn no money, starting from scratch. I must continue to remind myself of why I chose this – to build my dream, for myself and the people of Wales.
Time will tell if this pays off and puts Wales on the map, or whether I’ll need to remove my identity from the Internet, pretending that none of this ever happened.
