Startup Studio
Fundraising Fundamentals
(Public version, March 2021)
Attila Szigeti - Startup Studio Advisor
I'm here to help you build and grow your startup studio
https://www.attilaszigeti.com/
https://clarity.fm/aszig

This deck is for emerging studios and their founders
How much money does a studio need?
How to structure the investment?
How to prepare to approach investors?
What kind of investors to approach?
What should be in a studio investor deck?

“Startup studio” is a framework:
Read about other studios, do benchmarking and then
Take the framework and use it to custom-build your own
venture builder -> I’m here to help you

Intro
Foreword by
Mike Jones
@ Science-Inc
Overview
Are studios for
me?
Stories
Betaworks
Technospark
eFounders
Lab.Coop
Midealab
Backspace
Laicos
Innonic
Drukka
Framework
Leadership
Vision &
Strategy
Studio Funnel
EIRs
Core Team
Fundraising
Corporate VB-s
https://www.amazon.com//dp/B07NVNYM4C

Studio fundraising (especially the first time) is an iterative process that
requires patience, planning and experimentation
1. Vision and studio thesis
Why do you do this? What’s
your vision? Where do you
want to go?
5. Adjustment, closing the deal
Evaluating feedback, refining
vision and processes
2. Operational plans
Startup profile, sizing of core
team and resources
4. Contact with investors
Scouting, build relations,
pitching, negotiations,
getting feedback
3. Investment concept
How much? What structure? Pitch deck...

A basic recipe for a studio investment thesis
+ We believe in [market/technology/trend/opportunity]
+ Our studio wants to achieve [mission statement]
+ Therefore we will produce startups that [startup profile]
+ We are raising [amount] into [investment structure]
+ This money is to finance [cash flow structure]
+ This investment will [benefit for investors]
+ Ultimately we will [long-term vision for the studio]

Raise as much money
as you need to create a
batch of startups and
have enough runway
until the next liquidity
event in your studio
+ Cost of one startup:
people, infrastructure,
services
+ Batch size
+ Time from zero to
independence for
startups
+ Time until the studio
gets first returns

Single-batch startup studio
Year 1-2 Year 3-4 Year 5-6 Year 7-8
Startup 2
Startup 3
Startup 4
Startup 5
Startup 1
Year 9-10
Initial build
Startup independence
Startup exit, studio cash-out
raise here in year 0/1 enough money that lasts until
you can cash out your first startup

Multi-batch startup studio
Year 1-2 Year 3-4 Year 5-6 Year 7-8
Batch 2,
5 startups
Batch 3,
5 startups
Batch 1,
5 startups
Year 9-10
Initial build
Startup independence
Startup exit, studio cash-out
Your first studio investment for your first batch
second investment round for your second batch
AND/OR
new follow-on fund to grow your Batch 1 startups
further

Studio financing options
C
o
r
p
o
r
a
t
e
f
u
n
d
i
n
g
Agency work /
Bootstrapping Raising VC m
oney
into startups
Founder’s cash
R
a
i
s
i
n
g
V
C
/
L
P
m
o
n
e
y
f
o
r
t
h
e
s
t
u
d
i
o
Raising money
directly into the studio
Setting up a separate
fund / investment
vehicle
My assumption: You want to produce
startups that are compatible with
the usual startup lifecycle
(Start > Seed > Series A,B… > Exit)

Raising money directly into the studio
VC firm and/or
Private Investor
Startup studio company
(Ltd, Corporation…)
On-demand services to
startups, also holds all
startup equity
VC firm and/or
Private Investor
VC firm and/or
Private Investor
Cash for equity
Startup 1 Startup 2 Startup n
Cash and services for equity

Raising money directly into the studio
Pro
+ Seems like an easy setup
+ Potentially good value for money
(if the studio assets are valued
high)
Challenge / Contra
? Valuing the existing studio
! Compromising autonomy
! Makes it difficult to scale,
bring in new cash, new investors

Setting up a separate fund / investment vehicle
Investors of the
Fund/Holding
Startup studio company
(Ltd, Corporation…)
Basically and agency
serving the startups
Investors of the
Fund/Holding External investors
Cash for services
Independent
projects of the
studio
Startup 1 Startup 2
Fund
- Either official fund
- Or some holding
company
Startup n
Service
agreement
Cash for equity
Cash for equity

Setting up a separate fund / investment vehicle
Pro
+ Core Studio maintains autonomy
and flexibility
+ Easier long-term outlook to bring
in new investors, start new fund
+ Compartmentalising risks and
higher transparency
Challenge / Contra
! Needs a more complex structure
! You need someone with GP
skillset, fund management xp
! Conflict of interest between
Studio and Fund

Official Fund vs Holding Company
+ More convenient for investors
- High setup fee and regulations
- You need fund management skills
- Simple VC-s might not invest
(duplicate management fees…) so you
might need to find your LP-s or
“fund of fund”s
+ More cost efficient and easier
regulations
- Fewer traditional investor might
be open to diverge from investment
best practices

Startup progression from zero to independence
! Startup cap-table should be compatible with the expected,
traditional way
! Design a process that ensures startup independence
(financials, technology, people) so it’s “acquisition-ready”
! Co-founders and dedicated startup team should have enough
equity to stay motivated
! If you want to keep your (high) equity rate in your
startups, define your strategy and long-term role that
justifies it

Startup
Studio Initiative
Might have EIR / CEO
assigned
Most effort by Studio
Core Team
Seed - Spinoff go
Dedicated CEO (and
maybe CTO)
Relies on Studio Core
Team
Might have dedicated
Team for startup specific
roles
Interim step 1
…
Team identity, culture
… Effort shifting from
Core Team to Startup
Team
Spinoff done
Full Startup Leadership
(Almost) Full Dedicated
Team
Studio
- Limited on-demand
- Advisory
- Platform synergies?
Interim step 2
...
Studio

No matter the structure, investing into studios brings a lot
of potential benefits to investors
+ Insight into a whole batch
+ Potential preferential follow-on investing rights
+ Efficiency of one-to-many investment
+ Largely removing the team-risk factor
+ High(er) equity, high(er) ROI at exit

Your investor deck
should paint the whole
picture in a way that is
compatible with
traditional investors’
thinking and addresses
critical, sensitive areas
upfront
Executive summary
Financial summary
Vision & investment theory
Market / tech / trends
Studio leadership
Core Team competencies
EIR / CEO strategy
Roadmap
Potential portfolio
Studio basics, benchmarks

Prepare for challenging questions form investors
● Do you want to raise the capital into your studio or establish a separate fund? Why this way?
● Will the studio act as the GP or who will? Will this be an official fund or a holding company?
● How to cover the studios operational costs? For a management fee and carry or charge the
startups? Or do you have another solution?
● How will you manage conflicts of interest between the Studio the Fund and the Startups?
● How will you ensure successful exits of your portfolio and thus ensuring a high fund ROI?
● If you are converting your agency into a studio: How to value your current assets? How will you
restructure your organization to fit the new strategy?
● Are you raising a fixed-life fund or evergreen fund? How will you handle raising new capital
when needed?
● How will your studio preserve it's equity part in the startups and solve the "dead equity"
concern?
● Will you create ventures from internal process or join existing teams? What is your financial
modeling backing up your approach?
… and the list goes on. Yes, studio fundraising needs a lot of thinking ahead.

I’m here to help you with your fundraising...

My mission is to help venture builders grow and thrive everywhere. I'm passionate about the
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CEO @ Studio1 Fund, 2021-
Advisor to Studios, 2018-
COO & EIR @ Drukka, 2015-2018
Transformed a 12-people agency into a
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Studios starting plan
How does it work Whenever you have a studio
related question, you book a
call via the Clarity platform
and we jump on a conference call
at the agreed time.
We agree on the level of
intensity of the cooperation
(nr of calls, expectations,
deliverables) and upon
agreement I’ll become an
advisory member for your Team.
We co-create your game plan:
strategy, processes,
fundraising deck and
strategy, map out decision
points and options,
everything you need to get
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What’s included We can discuss any startup
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voice-only solution. So if you
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Access to my studio materials:
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benchmark documents.
Assessment of current
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Ideal for If you have one or more
pressing, urgent questions and
need immediate feedback.
Emerging studios who are
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Work with me and get access to my 5+ years and 10000+ hours of startup
studio related experience and insight...
"Attila is one of the most well-prepared
experts I've had the chance to work with. He
is a key player of the startup studio scene,
and the knowledge he brought to the table was
essential when developing the investment
structure of Studio One, the first private
fund that exclusively invests in startup
studio ventures in the CEE region. Attila not
only contributed to the concept of the fund
but also provides key insight to our
selection process, so we may find the right
entrepreneurs to lead our current and future
portfolio companies."
- Gergely Freész, CEO @ Studio One Pre-Seed
Investment
"Attila was my trusted COO and advisor for
three years. During this time he was
instrumental in transforming Drukka from a
web development and online marketing agency
into the fastest growing venture builder of
the CEE region. Attila's international
insight into startup studios and sense for
strategy enabled me to make the best
decisions in transforming and scaling my
organization. I recommend him as an expert
who can guide you in growing your own startup
studio."
- Tamás Bohner, CEO @ Drukka Startup Factory

Reach me at:
https://www.attilaszigeti.com/
https://clarity.fm/aszig