Venture studios are changing how startups can be created in the MENA region by starting with a market opportunity rather than a fully formed idea or founding team.
Under the model, a studio identifies a market problem, tests the opportunity with potential customers, develops an initial product and builds a team around it. If the concept proves viable, the business can be spun out as an independent company, with the studio continuing to provide capital and operational support.
This differs from venture capital, which usually backs an existing startup with a product, team and business model. Accelerators also typically work with companies after they have been founded. Venture studios can become involved before any of those elements are in place.
According to Ent Arabi, the model is gaining attention as startup ecosystems in Saudi Arabia, Egypt and the UAE seek structures that combine funding with product development, technology, operational expertise and team building. Studios use centralised teams to provide these capabilities across multiple ventures.
Founders can gain early access to resources and networks, but usually give up equity in return. That makes ownership, decision-making rights and the founder’s role important issues to define at the start of the partnership.
Source: EntArabi
