4 layers of company creation with a venture studio model. Elliott Parker | High Alpha Innovation

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This “venture fractal” will blow your mind: After selling ExactTarget for $2.5B, four partners launched a venture studio, High Alpha (layer 1), which has launched 40+ startups since 2015. One of the companies it started became a venture studio called High Alpha Innovation (layer 2), creating not only startups with corporations and universities but also corporate venture studios (layer 3), which in turn launch startups (layer 4).

This is a must-read & must-watch story about one of the world's top venture studios.

Before diving in, please comment “+” on this post to receive the “Co-founder Support” document from High Alpha Innovation. It includes a list of the 6 stages of launching startups, covering 29 processes, and details about the 8-week “Founder Bootcamp” program, which consists of 17 modules. The post to comment on:   / urn:li:share:7188281964662046720  

Elliott Parker, CEO of High Alpha Innovation, shared key insights:

1. High Alpha Innovation tries to answer what it looks like to scale a venture studio model, for example, to launch 100+ companies a year. You’re playing with the power law asset class, and you must have a very broad & diversified portfolio to find those 1-2 outliers that will make the most returns. “It’s hard to do when you’re only launching 4-5 companies a year.”
2. They aim to become the world's most valuable venture portfolio, with plans to launch 500+ startups in the next 10 years.
3. High Alpha (several funds) and its portfolio companies have raised $500M+.
4. High Alpha Innovation (HAI) launched 20 companies during the first 3 years, raising a total of $50M+. HAI plans to launch 20 more companies in the next 18 months and reach 100+ companies a year
5. HAI started with 3 people on the team in 2020 and grew to 50 employees in 2024.
6. The business model is taking 20-25% equity in startups as a studio, getting $1-2M in capital from corporate or university partners to launch a company (for ~20-29% of equity), and allocating at least 51% of equity to startup co-founders (CEO & other partners).
7. After launching some companies with a partner (a corporation or a university), pulling a VC fund of $25-50M becomes more efficient. HAI becomes the GP of the fund managing the underlying studio.
8. Co-founder profiles they attract to each company are ~45-year-old successful founders or early executives in startups with experience in creating products, fundraising, & building teams.
9. The process starts with generating 200-300 business ideas, which are then assessed and narrowed down to about 30 through rapid testing, and further refined through extensive validation and customer research to 5-10 viable concepts, from which 2-3 are selected for the sprint week leading to a launch decision.

📔 Also, Elliott recently published the book "The Illusion of Innovation", which discusses why corporations have a harder time producing breakthrough change and what they can do about it: https://www.amazon.com/Illusion-Innov...

00:00:00 Intro
00:01:32 About Venture Studio Family
00:02:42 Welcome: Elliott Parker
00:06:42 High Alpha’s structure
00:10:10 Successes and failures
00:16:34 Metrics
00:19:12 Business model
00:27:51 Working with Universities
00:34:24 Building with corporations vs. Independently
00:45:08 The Playbook
00:53:01 Founders
00:55:02 Disruption theory
00:58:50 Two failure modes for Venture Studios

Elliott Parker:   / elliottparker  
High Alpha Innovation: https://www.highalphainno.com/
Elliott's book "The Illusion of Innovation": https://www.amazon.com/Illusion-Innov...

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