If you’re really ambitious in startups, there’s only ever been two paths: founder vs. VC.
- Founders go deep on one company.
- VCs get to build a broad portfolio.
VCs bet on startups, not founders.
- So they’re incentivized to keep founders locked up in their original startups.
- They don’t want founders to diversify.
- VCs want a portfolio for themselves but not for founders.
“The power dynamic between venture capitalists and founders massively favors venture capitalists; after all, founders only have their one company, the survival of which depends on gaining funding, while venture capitalists see hundreds if not thousands of companies, and the default answer is “no.””
— Ben Thompson
How can we fund founders’ whole portfolios, not individual startups?
- I’ve explored this idea before with my 360 Deals for Founders idea.
This solves the fundamental misalignment between founders and investors:
- Founders shouldn’t have to go all-in on each idea.
- Investors should back founders long-term, not just for one startup.
Startup studios are the best of both sides of the table:
- Founders should build their own portfolios of companies.
Studios encourage founders to build more long-term focused startups:
- VCs love startups who can go public or get acquired within their 10-year fund cycles.
- Studios can use PE-style 30+ year funds or permanent capital structures.
- This avoids the rush to scale and exit startups prematurely.
I’m now building Utopic, the Dreamville (or Roc-A-Fella) for startups.
- Utopic Studio is my indie startup studio.
- Utopic Ventures will be my fund to invest in other founders.
This idea is a work-in-progress. If you’d like to riff on it, hit me up @neilthanedar on Twitter.