From Software Consulting to Venture Building: A Case Study on Venture Studio Business Models

Abstract: This master's thesis explores the relatively unexplored phenomenon of venture studios (also known as venture builders or startup studios), which are companies that systematically and concurrently build startups. Despite their growing popularity, the academic literature on how venture studios operate is still limited and no structured and extensive description of the business model appears to exist. This study aims to fill this gap by conducting a case study on six Swedish venture studios, interviewing co-founders, CEOs, and COOs to provide a clear and structured description of the business model. The business model canvas framework is used to present a generalizable venture studio business model identifying central elements such as a split workload allocation between consulting and venture building, a revenue division between capital and equity, a broad range of business and technology expertise as well as a structured approach to developing companies. The results are then compared with the business model of a software consulting firm, Backtick Technologies AB, highlighting key obstacles and possibilities for implementing the model. The authors’ final strategic recommendation for Backtick is to consider implementing a complete venture studio model, working with both internal and external business ideas, as they can leverage their technological expertise and product building capabilities while needing to strengthen their competence in necessary areas such as business development, recruitment, and investment sourcing. This study's main contribution, however, lies in providing a better understanding of how venture studios operate.