For your interest, we translate one of the last posts of Ben Yoskovitz, Founding Partner of Highline Beta, Venture Studio and Venture Capital based in Canada.
One of his latest posts is titled: “5 + 1 Predictions for Venture Studios in 2025”.
Here is the translation:
1. More Venture Studios on the way
I don’t have the exact number updated, but there must already be more than 1,000 venture studios. And if we consider that the definition is quite flexible, there are probably more.
This is not necessarily a bad thing. But the bar for quality and results has to continue to be raised (and validated), or venture studios will remain a niche in the global startup ecosystem.
More noise = more demanding
The more we talk about venture studios, the more questions arise. And as we already know, with great power comes great responsibility.
Questions are not a bad thing. For those of us building studios, they force us to test our assumptions, iterate and learn. There is no such thing as the “perfect” venture studio. There are many different approaches, and that’s a good thing. The more experimentation there is, the more likely some studios will succeed and generate real value.
Founders, investors and other stakeholders will ask, “Why should I partner with a venture studio?” And even more importantly, “Why with your venture studio?” We studio operators need to have clear answers. And the higher the expectations go, the harder it will be to answer them.
More studios means more options for entrepreneurs (🤗), but also more confusion (😰). Those who want to partner with studios will have to do good due diligence.
The three types of studios that will grow the most:
- Venture vertical studios
- Venture geographic studies
- Venture corporate studios
Venture Studios vertical
As I said, the future of venture studios is vertical.
Specialization wins. I estimate that 90% of new studios in 2025 will focus on a specific industry (or a few), and many of the generalist studios will pivot to niches. Repeatable startup creation-with defined playbooks for validation, go-to-market, fundraising, hiring, product development, scaling, etc.-is only possible if you work vertically.
We at Highline Beta are heading in that direction. In the first half of 2025 there will be interesting announcements.
I am often asked, “Which verticals are you working in?” or “Which verticals do you find interesting?” I can’t answer the first one publicly, but the second one is easy: all of them. In any vertical you can easily build 10-20 startups in 3-4 years. Some industries will be more trendy, but that doesn’t matter that much. I firmly believe that solving boring problems is the key to winning. And venture studios can thrive precisely there: in underserved sectors with unglamorous problems.
Venture Studios geographic
Venture studios can play a key role in the economic development of secondary markets. I’ve talked to people in different regions who see studios as a way to foster local entrepreneurship. It’s the same reason why there are geographically specific accelerators and VC funds.
But even these studies must focus on specific industries, as geography alone is not a sufficient competitive advantage. If you can leverage unique location assets (concentrated customers, academic talent, nearby resources, public funding, etc.), you can combine geography + vertical and build something very solid.
Venture Studios corporate
Interest in venture studios is attracting large corporations. The U.S. economy, despite global uncertainty, may be on the rebound, which tends to make large companies more risk-taking.
- More risk → more growth
- More growth → build new things
- Building new things → venture studios
I believe that in 2025 (and 2026) we will see more large companies launching their own venture studios. They will create internal businesses (which they control 100%) and external spin-offs (sharing ownership with co-investors). They often start with the former and discover the advantages of the latter: fewer constraints, more speed, better talent, lower risk.
At Highline Beta we work with several corporations to design and optimize venture studios. If they are able to activate their assets well, the value that can be generated is enormous.
2. More VCs will approach the model.
As venture studios continue to generate quality startups, more VCs will open up to the model. The main problem will continue to be the cap table. If the studio takes too much equity, VCs will pull back. That’s the way it works. Some will never change their minds, but others are already getting in.
Some VCs are even creating their own studios. In this case, they have a larger stake from the beginning and then lead subsequent rounds, thus protecting their initial investment. This is an indication that the startup creation phase is attractive in terms of valuation and return potential.
VCs are opportunistic. If they see promising startups coming out of venture studios, with the ability to scale and reasonable cap tables, they will invest.
More capital for venture studios (although it is still early days).
A venture studio is not a venture studio if it does not finance what it builds.
Financing startups requires capital.
Studios can obtain it in several ways: by generating revenue (services, consulting, products…) or by raising funds. Most opt for the latter, creating VC funds or structures such as syndicates, rolling funds or SPVs.
Traditional LPs are starting to explore other ways of investing, but it is still early days. Many are not fully aware of what a venture studio is. In addition, the industry is still trying to define itself: is it a sector, a distinct asset class? Some want to distance themselves from the VC, others want to position themselves as distinct VCs. This creates confusion among investors.
To date, I know of only one fund that invests exclusively in venture studios (Vault Fund), although more are on the way. Raising capital for a studio is not easy, and the track record will be increasingly important.
We will see more capital invested in 2025, but it will not be an explosion. Differentiation, proven results and a clear proposition for investors will be key.
4. More venture studios failures
Not everything will be positive in 2025.
Running a sustainable venture studio is difficult.
Studios gain participation because of the work and capital they contribute. But:
- Work = people
- People = cost
- Where does this money come from?
Venture studios have relatively high operating costs relative to the capital they invest. Unlike VC funds, which tend to live on 2% fees.
When a studio cannot sustain itself with revenue, investment, fees or other resources, it disappears (or downsizes). We have already seen some close in 2024, and there will be more in 2025.
Hype can be a double-edged sword: it attracts talent and investors, but it also leads inexperienced people to set up studios without being ready.
5. Unclear performance data
The reality is that there is no solid data on the performance of venture studios.
We need analysts like Peter Walker (from Carta) to include them in their reports. But first we would have to identify which startups really come from studios… and it is not always obvious.
Venture capital data remains murky, although there is more volume. With venture studios, on the other hand, there are hardly any metrics. Some don’t even consider themselves venture studios.
Two examples that complicate the analysis:
- Some studios only invest, without incubating: that makes them more like a traditional VC.
- Some VCs incubate startups: so, do we attribute this success to the VC model or to the studio model?
The bottom line is that for quite some time, the data will continue to be confusing. Don’t believe all the hype. I believe strongly in the model – that’s why I do it!!! – but I don’t rely on global data to justify it.
6. Extra: Towards greater transparency
The growth of venture studios is positive:
- Challenges accepted truths about how startups are built
- Introduces innovation in the way businesses are created and financed
But its novelty and lack of definition generate confusion. And confusion attracts unethical actors and drives away the good ones (entrepreneurs, investors, employees…).
Transparency will be key.
Venture studios should share more about their terms. Accelerators are usually public with their deals. VCs are also public, at least in part (average ticket, sectors, valuation ranges…). On the other hand, many studios do not share anything. Sometimes they don’t even explain it well in negotiations. That’s a red flag 🚩.
It is not necessary to publish everything on the web, but it is necessary to be clear. Many studios take a large part of the cap table and do not know how to justify that value, so they do not show it. They know that some investors will not accept it.
I understand that. It’s complicated.
But if the industry is to mature, it needs more transparency.
- More studios → more options for founders, investors and partners.
- More options → more competition
- More competition → more differentiation
And one of the best ways to differentiate yourself is to be transparent.
