A venture studio is a legal entity that builds new companies internally and finances them until the new startup receives external funding and becomes independent.
Often the venture studio is already involved in the idea generation phase and creates an own team (so called Entrepreneurs in Residence) that validates the business model. For the operational activities the venture studio receives a share of the company and the Entrepreneurs in Residence become Cofounders also with a significant share.
At KAPSLY, we strongly believe in the Venture Studio model, and we also believe in founders who have already committed to their idea and made the first steps alone. Unfortunately, most venture studios are not open to external startups. KAPSLY provides a venture studio platform in order to improve the match between startup and service provider.
Startups co-founded by venture studios scale faster and provide better returns to investors. On average, these startups have a 53% internal rate of return (IRR). Compare that to the average for non-studio startups, which sits at 21%.
A venture studio is also called a startup studio business model or company builder.
Service for Equity is a concept where external parties contribute services of any kind in return for company shares of the client. This concept enables resource investing, as opposed to capital investing. It is also closely related to Sweat Equity, which usually refers to team members who provide uncompensated labour and receive company shares for that. See even more terms in the glossary. At KAPSLY, we work with virtual stocks instead of regular stocks. This lessens the burden of the founders regarding the cap table and reduces legal hassle when setting up contracts.
It adds security for both parties.
First, our Agile Service Agreements allow you time to get to know the business partner through transparent collaboration without immediately committing to more binding virtual shares. Furthermore, both parties are invested in the project and have aligned goals.
Outstanding debt are the unpaid invoices for the startup. When a service provider wants to invest in a startup, we recommend to do it with a convertible loan, which enables the client/startup to either repay later or compensate the service provider with (virtual) company shares, that is the conversion event.
Virtual shares are a promise to a future payment based on the stock price, it is simply a bilateral agreement and hence faster and cheaper to set up.
No. As a startup, you should always be careful to give away equity. You want to keep a clean cap table and a small board. Equity is like marriage and you should pick your partners wisely. With our Agile Service Agreements, you get the time to get to know your business partner by using delayed payment terms before committing to any company participation. Furthermore, we encourage you to use Virtual Share Agreements, where you do not give away real equity, but virtual company shares (Virtual Share == Phantom Stock)
The KAPSLY venture community provides all kinds of services for healthtech companies. Besides specialised service, such as quality management, regulatory affairs or product development, we provide general services such as legal, accounting, branding, website development or accounting.
Most agencies also focus on two additional specialised niches, such as building custom apps, developing biotech or Medtech infrastructure or training AI and Machine learning.
Service-for-equity allows you to focus on your business operations and create value right away.
You can work with professionals while keeping your cash burn lower. With a service-for-equity you can also incentivise people/companies who directly impact your business success to stay with you long-term. Usually, you would use common equity for founders. However, for employees or external companies, you can use virtual shares instead - the cash equivalent to your shares. With these, you don't have additional board members or the legal work to add them to your list of shareholders.
We are always available to help you find a solution that works for you!
You can send us a message or book a call with us here.
We are looking for partners with a track record in working with early-stage startups. Ideally you have a team of 5-50 employees and designated people for startup projects. A network in the healthcare space is of advantage
The KAPSLY platform gives the whole infrastructure needed to run ventures studio activities. You do not have create your own contracts or build your tools to keep track of the compensation.
Additionally, you are part of a community that professionally supports startups, so you can get funding for your own or clients projects, and find complementary service partners.
There are three main reasons:
- You can benefit from the actual value creation that your services bring to your clients.
- Build long-term partnerships with your clients.
- Motivate you employees with exciting startup projects.
In any case, it allows you to position your company as innovative venture builder to attract other clients.
Once you have an agreement with the startup, the project scope and compensation terms are defined in a convertible service agreement. The startup will have to pay a certain amount, and the remaining amount can be compensated with company shares at a later time.
The terms at which the service value converts into company shares are defined in the beginning.
Usually we recommend that the startup provides virtual company shares, as this is faster and cheaper.
No and Yes. You decide with whom you want to work. But you commit to work with at least 2 startups per year. When you work with a startup we expect you to invest a minimum of CHF 10´000 of service value. You have the option to invest the amount in cash through the investment syndicate if you prefer to hold the shares privately.
Working with startups is, of course, always riskier than working with established corporations. On average, Startups co-founded by venture studios scale faster and provide better returns to investors, with an average 53% internal rate of return (IRR), compared to non-studio startups, at 21%. Source
Thus, your work as a longtime partner directly impacts their success
A syndicate is a group of investors who have a common interest and act as one partnership to invest in a startup.
Hence, a syndicate acts as one investor.
The money is used for value creating activities and the startup is committed to allocate the money to our service partners. Since we are a venture studio community, we believe that our service partners have the biggest impact on the startup to achieve milestones faster and cheaper.
We are looking for experienced entrepreneurs and business angels who can provide additional value to our startups, especially in the healthtech sector. In general the syndicate is open to anyone who wants to invest in healthtech startups. Simply join our investment newsletter and receive selected deals to your inbox for free.
With the syndicate you get access to our venture studio community and receive a deal flow without scouting for startups yourself. We take care of negotiating term deals and performing due diligence, and setting up the contracts. Additionally, the capital efficiency is higher due to our service partners that have supported startups many times.
The minimum investment amount per deal is CHF 5’000 and the deal only gets completed if over CHF 50´000 are invested.
Yes, your name will not be shared with other investors or the startup automatically.
Your name will not appear on the cap table of the startup either. However, we encourage our investors to get in touch with the founders.
Yes, it is possible to transfer your stake to another investor in a secondary transaction. The deal manager must be informed and needs to approve the transaction.
For every deal a new simple partnership is formed through a legal contract amongst the syndicate investors.
For more information please contact us, we are happy to provide you with all details.
After clicking on "become an investor" and having completed the form, you receive deals straight to your inbox.
You make your own investment decisions on a deal by deal basis, usually within two weeks after receiving the investment memo.
You can find additional details regarding platform and usage in the application form.