Venture Studios – Startup Formation & Initial Capitalization Considerations

By: Sarah F. Chambless , Jonathan Sagot , Byron Dailey , Mark C. Stevens

Venture studios provide unique opportunities to foster innovation and create value. But when that exciting moment comes to spin out a concept into a standalone startup, you’ll face a host of critical considerations that determine whether it will succeed.

As explored in Fenwick’s white paper, “Venture Studios – Strategy and Structure,” written by Byron Dailey, a well-designed venture studio, also known as a startup studio or incubator, aligns the economic incentives of the venture studio’s team with those of its investors while also optimizing for many other financial, legal, strategic, and practical considerations.

This white paper focuses on the principles and tensions surrounding the structuring and spinout of venture studio startups, including considerations regarding greenlighting, formation, timing, and capitalization strategy.

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