Coplex - Venture Studios

The business model and numbers of a corporate venture builder, Coplex - Venture Studios, launched 150+ startups (65+ are alive today) and builds studios for corporates: 1. Originally, it was a digital agency. Zach Ferres joined as CEO in 2012. In 2016, they transitioned into a venture studio, building startups with corporations (initially taking 5% equity in addition to fees). In 2020, they switched to the GP/LP funds model with corporates. 2. Build 10+* venture studios for corporates. 3. Each fund is $20-40M. 4. Now, the process starts with a $300-500K* charge for several months of studio design, resulting in a 120+ page document describing all processes of the future studio. 5. They always work with external ideas from corporates. 6. Equity split: on average, 20% studio, 30% corporation, 35% CEO, 15% ESOP. 7. The studio usually takes 20 to 30% carried interest in the fund. They don't charge a management fee but do charge an annual fee to run the studio. 8. When the studio co-invests alongside corporate partners, they can participate in the upsides as an LP. 9. On average, these funds invest $500K in each startup. The funds support building 5 to 10 companies a year for 3-4 years, with the remaining capital allocated for pro-rata follow-on investments. 10. They have a team of 8 full-time employees. Before COVID, they had 35 employees but decided to leverage vendors and freelancers instead of an in-house team. 11. They find the CEO for corporate studios and then hire a team. For startups, they prefer to attract non-technical and revenue-focused CEOs. 12. Ideal corporate partner: Minimum $1B in revenue; launched their CVC (a good sign); large and boring vertical businesses. Why partner with corporates? 1. They didn't want to have huge sales teams to attract entrepreneurs and investors. 2. Raising external capital is very difficult for studios. In 2016, it was so challenging to raise capital for a venture studio fund that they decided never to do it. This is where corporations come in with their capital. 3. As a studio, you don't need to charge startups. Challenges of working with corporations: 1. Competing with their internal functions. The studio must be outside the corporation because dependence on internal corporate staff makes it very hard to run a studio. 2. Long sales cycles to convince their boards to take the risk of building externally and then having a separate team. 3. Complex legal, tax, and structural implications, especially when working with finance, healthcare, insurance companies, and nonprofits. 4. It’s still a 10-year lifecycle. View the full interview for more insights: https://lnkd.in/dF-whjYR * Some updated numbers are from Michael Ellenby at last Friday's meeting of the Venture Studio Family. Join the paid community to get more studio insights and participate in regular online meetings with studios.