What do Venture Builders do?

Abstract: Venture builders are a growing part of the startup finance and creation ecosystem but there is a lack of understanding about what they do. We provide a comprehensive overview of the business model as we compile a database with 448 active venture builders, survey 82 firms, and conduct six interviews. We find that venture builders support startups with their workforce, operational best practices, networks, and capital. Our results also show that the business model can be segmented into three types. "Pure-play Venture Builders" act like operators, have high equity stakes, are deeply involved into the ventures' operations, and generate business ideas internally. "Venture Builder as a Service" firms work as consultants on a project basis, sell services for fees to clients, and take almost no equity. "Venture Capitalists and Venture Builders" act like investors but support entrepreneurs with startup ideas, market research, and early operational advice, in exchange for better deal terms.