In the last articles, we covered many aspects of the Startup Studio model and today we will dive into the Startup Studio benefits.
If you want to catch up with the old ones, you can find them here:
- The Startup Studios advent in Italy
- History of Startup Studios Model: a 30-years journey
- Types of Startup Studios
- What’s the difference between Accelerators, Incubators, and Startup Studios?
- Startup Studio approach to market
Now we can start!
Startup Studio Benefits: trends and successes
Global Studio presence
Let’s start with the number of active startup Studios worldwide.
In the 1990s, the Venture Builders model was at the very beginning. In those years, the first founders were pioneers of the model in a world still dominated by the old way of doing business.
From the 90s an exponential growth of active Studios took place at the global level; We could count almost 200 Studios in 2014.
How is the present situation? Well, not surprisingly the number of Studios in the world has exponentially increased exceeding 500. We have 560 active Studios in 2021.
What about Italy? We can count 8 Venture Builders, not that many. But still, considering that Mamazen was the sole Startup Studio in 2017, in 5 years our country experienced a 700% growth.
But which is the ground for this growth? We can name many reasons, but the truth is that startups built by Studios perform much better than other startups:
- 84% of the startups generated by a Studio make it to a seed round
- Of those, at least 72% make it to a Series A round, compared to 42% for traditional startups.
- Overall, 60% of all startups created by a Studio reach a Series A round.
- The Average- time-to-Exit of startups generated by a Studio is 4 years, compared to 8 years for traditional startups.
Other Startup Studio Benefits
The Exit Rate
The Exit Rate is calculated as the ratio between the number of Exits on the number of startups created by the Studio.
- Studios Exit Rate is on average 16%, ranging between 9 and 30%.
- The Studio that accounts for the highest Exit Rate is Betaworks, which boasts a 30%.
- What about the Exit Rate for startups built outside of a Studio? Well, it is not encouraging: it is just 8%.
Valuation at Exit
The number of acquisitions is much higher than the number of IPOs (Initial Public Offering), this means that it is much more likely that a startup is acquired by a larger company rather than be listed on a stock exchange (as Coinbase has recently done).
One figure is still worth highlighting: the number of startups generated by a Studio that reach the Exit through an IPO is three times higher than for traditional startups.
Talking about valuation, startups produced by Studios get Exits at higher values:
- median valuation is $74 million, compared to $50 million for Exits from VCs.
- The average internal rate of return – IRR – for a Studio is 53%, for other startups is 21.3%.
Hunting for Unicorns
With the term Unicorn, we mean a startup that has been valued at more than 1 billion dollars. Yes, you got it right. $1 billion.
As you can imagine this does not happen so frequently. That’s why such startups are called in this way. Yet, despite the difficulty, unicorns have been found in recent years. Nice isn’t it?
Why am I telling you about this? Well, 4% of all known Unicorns have been created by three Startup Studios. Among these, we have Science Inc. that created Dollar Shave Club only 1 year after its foundation.
Now you know the Startup Studio benefits
We can move on to the next article right? And as usual here is a preview of what you will read in our next appointment: how to organize the budget and the team of a Studio.
Mamazen is in a never ending evolution. We have been the first to introduce the Startup Studio model in Italy so, now we want to do something more. Our aim is to start a new era in the startup world. That’s why we have combined the Startup Studio model with the Dual Entity Model, a model designed to reduce the risk for investors dramatically.
That’s why we have combined the Startup Studio model with the Dual Entity Model, a model designed to reduce the risk of us as investors dramatically.
Do you want to hear more?