The reason we set-up Prototyze as a ‘Venture Studio’ is to improve the process of creating innovation-driven businesses.
For centuries, businesses were usually founded in two ways. Either an individual entrepreneur or by an established industrial conglomerate expanding into a new segment or sector.
The former sometimes grew into the latter. So, a Conrad Hilton become Hilton Hotels or a Soichiro Honda became Honda Motors.
Then the ‘startup’ model emerged in Silicon Valley about fifty years ago. It was predicated on these assumptions:
Venture investors (both angels and institutions) have been key drivers of this startup model.
But a key point is that they’re mainly focused on the process BEFORE the investment into the company. Their greatest time and effort and capability is in creating sectoral thesis, finding deals, evaluating them and then monitoring their portfolio along strategic and financial parameters.
But venture investors are not designed to coach, hand-hold or support a venture. However, coaching, support and hand-holding AFTER an investment is a critical reason for success of a venture. And this is time-and-resource intensive to a scale that venture firms (or angel investors) are NOT designed for.
But a venture studio is founded on the belief that the outcome probability of success is much higher if an infant venture is supported by a nurturing ‘family’. As opposed to the venture-equivalent Spartan practice of putting a new-born out in the snow and assuming that if they are made of the right stuff they will survive.
Our belief is somewhat different. We think that accepting an overwhelming chance of failure as somehow being intrinsic to digital economy ventures is a negation of our abilities. And this cavalier approach has serious consequences. It damages the lives of people and the money of investors.