The true cost of running a startup studio

Why do venture studios have high operational costs?

Most people misunderstand the true cost of running a startup studio.

In a traditional fund, 20% of the total size typically goes toward operations.

But studios don’t just invest—they’re also cofounders and operators. That dual role means operational costs can surge to 40-60%.

This often raises red flags for investors. Why?

Because we’ve been forcing studios into standard fund structures, Hiding costs in management fees, special arrangements, and portfolio company fees.

It’s confusing. It’s misleading. And it’s not sustainable.

The reality? Studios are more expensive to operate. That’s a feature, not a flaw.

Transparency is key. And that’s why holding companies often work better.

Investors can:

• See actual budgets upfront,
• Evaluate how money adds value,
• And avoid being blindsided by obfuscated costs.

No money for ops = No studio.

Let’s build this the right way.

Author

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