The world of startup investing is undergoing a significant shift. While traditional venture capital still commands attention, an emerging model — venture studios — is capturing the interest of top-tier investors. Visionaries like Jeff Bezos, Richard Branson, and the former CEO of PayPal have all placed their bets on this model, recognizing its potential to generate higher-quality startups and superior returns.

But what makes venture studios so attractive to these elite investors? And why do only a select 20% of investors actively pursue studio-backed companies? This blog explores the rise of venture studios, why some investors are hesitant, and what makes the top 20% so bullish on this new model.

Investor Sentiment: The 60/20/20 Split

When it comes to venture studios, investor sentiment can be broken down into three distinct categories:

• 60% of investors — Not interested at allThis group avoids studio-built companies entirely, often citing issues with the company's cap table (which looks different due to the venture studio’s stake in the business). For these investors, unfamiliarity breeds resistance.

• 20% of investors — Interested but hesitant This group will look at studio deals but rarely takes action. Despite showing curiosity, they often fall back on concerns over control, dilution, or a lack of understanding of the venture studio asset class.

• 20% of investors — Actively investing in studio-built companies The final 20% are the pioneers. They have not only explored the model but also placed bets on it. These investors are actively looking for more studio-backed startups, and they’re often the ones reaping the biggest rewards.

  

Why the Top 20% of Investors Are Doubling Down on Venture Studios

While the first two groups are skeptical, the top 20% see a compelling opportunity. But what makes them so confident in venture studios? Here are three key reasons:

1️. Superior Quality & Higher Returns

Investors are always chasing returns, and venture studios have a strong track record of delivering them. According to industry data, venture studios yield an average Internal Rate of Return (IRR) of 60%, significantly higher than traditional venture capital portfolios.

But why are the returns higher?

Venture studios create better startups. Studios operate as "startup factories," using pre-built systems, experienced operators, and proven processes to launch startups with precision. This approach minimizes the risk of failure while maximizing the chance of creating scalable, high-growth companies.

Example: If you compare a typical startup that begins with two founders in a garage to a venture studio startup, the difference is stark. The studio’s startup is often backed by:

• A fully formed operational team

• Market research from day one

• Access to a larger network of investors, mentors, and industry connections

This structured, methodical approach means studio-built companies are more mature when they hit the market — and investors know it.

2️.  Investors Who Take Time to Learn About the Venture Studio Model

While the 60% group avoids studio-backed startups, the top 20% have done their homework. They understand the nuances of how venture studios operate and, more importantly, why the cap table looks different.

The cap table is often a sticking point for investors unfamiliar with venture studios. In traditional startups, founders and early investors hold the lion’s share of equity. But in a studio-backed startup, the venture studio itself takes an early equity position, which can make the cap table look “unfamiliar” to outsiders.

However, investors who study the model realize that this structure works in their favor. Why? Because the studio’s active involvement reduces risk. The founders aren't working alone — they’re supported by experienced builders, engineers, and operators. The studio’s stake represents its "sweat equity" in building the company.

3️. Venture Studio Efficiencies Lead to Higher-Quality Companies

Unlike traditional startups, studio-built startups don’t start from scratch. The venture studio model brings efficiencies that fast-track success.

These efficiencies include:

• Pre-built Processes: Systems for hiring, marketing, and fundraising are already in place. Instead of wasting time figuring it all out, the team can hit the ground running.

• Faster Speed to Market: A venture studio can spin up a startup in months, not years, giving them a "speed advantage" over traditional startups.

• Access to a Diverse Network: Studios often have existing networks of investors, talent pools, and strategic partners, giving startups an edge.

With these efficiencies in place, studio-built startups are often stronger, faster, and more resilient. They are born with a "startup advantage" that traditional founders have to build over years. This combination of speed, structure, and support makes venture studio companies far more attractive to the top 20% of investors.

Conclusion

The venture studio model is still in its early days, but it’s already clear that the top 20% of investors are ahead of the curve. Visionaries like Bezos, Branson, and PayPal’s former CEO are leading the way, seizing opportunities that others overlook.

For founders, venture studios offer a chance to build startups with world-class support and operational excellence. For investors, they offer higher returns, better quality startups, and more predictable outcomes.

The question is: Which group do you want to be in? The 60% who avoid the model? The 20% who hesitate? Or the 20% who are shaping the future of startup creation?

If you’re a founder or investor curious about how venture studios work, YE Stack is actively working to build scalable startups with exceptional founders. Want to learn more? Let's connect and shape the future together.