The Venture Studio Index Whitepaper
Establishing the Open Standard Foundation for an Emerging Asset Class
The venture studio ecosystem has reached a pivotal milestone with the release of the Venture Studio Index (VSI) as a comprehensive open standard for studio evaluation and comparison.
After months of development and refinement based on insights from over 500 venture studios worldwide, the Venture Studio Forum is releasing the complete VSI whitepaper. A standardized methodology designed to bring transparency, consistency, and rigor to venture studio assessment. This represents far more than a new evaluation tool; it marks a fundamental shift in how the venture studio model transitions from an experimental approach to an established, investable asset class.
From Fragmentation to Standardization
The venture studio ecosystem has long grappled with a paradox: venture studios demonstrate compelling performance characteristics and systematic advantages over traditional venture capital, yet struggle to attract institutional capital at scale. The root cause isn’t lack of merit, it’s a lack of standardization.
Without common frameworks for measuring performance, comparing operational models, or evaluating cost structures, every studio investment requires extensive custom due diligence. Family offices, institutional investors, and limited partners face the challenge of assessing fundamentally different entities using evaluation criteria designed for traditional fund managers. This friction has constrained capital flows despite strong underlying economics.
The Venture Studio Index addresses this challenge head-on by providing a data-driven framework that aligns capital allocators around common terms and evaluation methodologies. By establishing standardized benchmarks, consistent reporting structures, and transparent performance metrics, the VSI enables apples-to-apples comparison across studios with different formation roles, return profiles, and operational approaches.
What Makes the VSI an Open Standard
The decision to release the VSI as an open standard reflects a deliberate choice to prioritize ecosystem development over proprietary advantage. The methodology, frameworks, and evaluation criteria are freely available to any studio, investor, or stakeholder seeking to apply them.
This open approach serves multiple strategic objectives:
Accelerating Adoption: By removing barriers to implementation, the VSI can rapidly become the default framework for studio evaluation across the ecosystem. Studios can self-assess using VSI criteria, investors can request VSI reports during due diligence, and service providers can build tools aligned with VSI standards.
Enabling Innovation: An open standard provides a foundation for third-party development. Financial platforms can integrate VSI metrics, analytical tools can leverage VSI data structures, and research institutions can conduct comparative studies using standardized measurements.
Building Trust: Transparency in methodology builds confidence in outcomes. When evaluation criteria are openly documented rather than proprietary black boxes, stakeholders can understand exactly how assessments are conducted and what drives specific conclusions.
Creating Network Effects: As more participants adopt VSI standards, the value of the framework increases for all users. Consistent reporting enables better benchmarking, standardized terminology facilitates clearer communication, and shared evaluation criteria streamline investment processes.
The VSI was developed by 9point8 Collective and is licensed to the Venture Studio Forum to publish as an open standard and steward community use. This licensing structure ensures both rigorous development and broad accessibility—combining the expertise required to create sophisticated evaluation methodology with the community orientation necessary for widespread adoption.
Core Components of the VSI Methodology
The VSI framework rests on three foundational pillars that together provide comprehensive studio assessment:
1. Two-Factor Categorization
Studios are classified along two critical dimensions that fundamentally shape their operational model and return expectations:
Formation Role defines how studios create companies and at what stage they engage:
Founder Studios develop concepts internally and bring in leadership to execute
Cofounder Studios partner with entrepreneurs at the concept stage
Late Cofounder Studios join existing early-stage ventures
Refounder Studios acquire or license existing assets as foundation for new ventures
Return Profile establishes expected investment timelines and liquidity characteristics:
Deep Tech focuses on R&D-intensive technologies with significant technical risk
Venture-Return targets high-growth opportunities with power-law distributions
Private Equity-Profile builds sustainable businesses with M&A exit paths
Income-Focused creates cash-flow positive businesses with regular distributions
This categorization immediately clarifies what type of companies a studio creates and how it creates them, essential context for evaluating any other performance metric.
2. Venture Studio Cost Structure Methodology (VSCSM)
The VSCSM provides unprecedented transparency into how studios deploy capital across five distinct categories:
Cost of Builds: Direct operational expenses for ideation, validation, and development of portfolio companies
Studio SG&A: Operating expenses for maintaining the studio entity itself
Founding Investment: Minimal capital to establish entities
Primary Investment: Structured investment capital in to created companies
Follow-On Investment: Capital for participation in subsequent financing rounds
By standardizing cost categorization, the VSCSM enables meaningful comparison of capital efficiency across studios with vastly different operational models and legal structures. A deep tech studio’s higher cost per company becomes understandable when allocated appropriately between R&D infrastructure and traditional investment capital. A lean software studio’s efficiency is properly contextualized when operational expenses are distinguished from founding investment. The VSCSM focuses on how capital is allocated to create equity value.
3. Three-Function Performance Analysis
Every venture studio performs three core functions, and the VSI evaluates each systematically:
Entrepreneur Function: How effectively does the studio identify and validate opportunities? This encompasses ideation processes, validation methodologies, leadership identification, and systematic de-risking of concepts before full company formation.
Operator Function: How efficiently does the studio build and support companies? This includes team deployment, operational scope, support duration, and systematic company building capabilities.
Investor Function: How strategically does the studio deploy capital and manage portfolio? This covers funding strategy, ownership structures, liquidity planning, and alignment with follow-on capital sources.
Evaluating studios through these three lenses reveals whether challenges stem from ideation quality, operational execution, investment strategy, or misalignment between these functions.
Significant Enhancements in the Full Release
While earlier VSI communications introduced the core framework, the complete whitepaper incorporates substantial refinements based on practical application and stakeholder feedback:
Expanded VSCSM Metrics
The cost structure methodology now includes comprehensive performance ratios that translate raw cost data into actionable insights:
Per-Company Metrics establish baseline efficiency:
Average Cost per Company: Total capital required from concept to independent operation
Average Cost per Point of Common: Capital efficiency for operational value creation
Average Cost per Point of Preferred: Cash investment efficiency for structured capital
Allocation Ratios reveal strategic priorities:
Build to SG&A: Proportion of capital allocated to value creation versus overhead
Operating Expense to Investment: Balance between operational and financial deployment
Preferred to Common: Equity composition strategy reflecting operational versus cash investment
Follow-on to Investment: Emphasis on maintaining ownership through subsequent rounds
Fund Source Ratio: Percentage of total capital sourced from the evaluated fund vehicle
These expanded metrics enable nuanced assessment of capital deployment efficiency while accounting for sector-specific requirements and strategic choices.
Enhanced Investor Data Elements
The investor function evaluation now captures critical fund economics factors that determine long-term success, while maintaining core relevant factors to evaluate strategy and approach.
Fund Economics: Comprehensive detail on management fees, carried interest, LP participation requirements, and hurdle rates. This enables direct comparison with traditional fund structures while accounting for studio-specific operational costs.
Liquidity Strategy: Clear articulation of planned exit approach—full acquisition, partial secondary sales, or hold strategies for ongoing distributions. This clarity helps investors understand expected return timing and cash flow patterns.
Target Follow-On Capital: Explicit identification of anticipated external investor profile and investment stage. This reveals whether studio funding strategies will successfully bridge portfolio companies to their intended next capital sources.
PortCo Ownership Structure: Detailed breakdown of common versus preferred equity allocations and how ownership evolves through subsequent rounds. This transparency addresses a critical investor concern about dilution and long-term value capture.
These enhancements address key questions institutional investors consistently raise during studio due diligence, reducing friction in investment processes.
Improved Definitional Clarity
The full whitepaper provides precise definitions that eliminate ambiguity in studio evaluation:
Venture Studio Definition: A company that systematically creates other companies by exercising meaningful control over entrepreneur, operator, and investor functions. This definition clearly distinguishes studios from accelerators, incubators, funds, and agencies while allowing flexibility across different studio models.
Formation Role Characteristics: Detailed description of capabilities, processes, and infrastructure requirements for each formation role. This helps studios self-assess alignment and helps investors evaluate operational fit.
Return Profile Expectations: Specific guidance on appropriate timeline, capital requirements, risk profiles, and exit strategies for each return profile. This grounds performance evaluation in realistic sector benchmarks.
These definitional refinements eliminate common sources of confusion and enable more precise communication between studios and investors.
Early Market Validation and Use Cases
The VSI’s transition from concept to practical application is already generating significant traction across the investment community. Early indicators from venture studio investors suggest the framework addresses real pain points and fills genuine market needs.
Institutional LP Application
A limited partner with portfolio allocation across more than a dozen venture studios has expressed strong interest in leveraging the VSI across three critical use cases:
Future Deal Evaluation: Using VSI reports as standardized due diligence input for new studio investments. Rather than developing custom evaluation frameworks for each opportunity, this LP can request VSI assessments that provide consistent, comparable analysis across formation roles and return profiles. This dramatically accelerates initial screening and enables more efficient allocation of deep diligence resources to the most promising opportunities.
Existing Portfolio Monitoring: Applying VSI metrics to current studio investments for consistent performance tracking. By standardizing how operational efficiency, capital deployment, and portfolio outcomes are measured, the LP gains clear visibility into which studios are executing according to plan and which require closer attention or additional support. This ongoing monitoring capability represents a significant improvement over the bespoke reporting studios typically provide.
Co-Investment Communication: Sharing VSI reports with potential co-investors to facilitate syndication and follow-on rounds. When evaluating opportunities to invest alongside existing studio LPs or participate in subsequent fund vehicles, having standardized performance data eliminates the need for extensive information translation and enables faster, more confident decision-making.
This comprehensive application across the investment lifecycle validates the VSI’s practical utility beyond theoretical evaluation frameworks.
Family Office Adoption
Multiple family offices have identified the VSI as a core tool for venture studio opportunity assessment and stakeholder communication. This adoption pattern reflects specific family office needs that the VSI addresses effectively:
Portfolio Diversification Analysis: Family offices typically maintain exposure across multiple asset classes and investment strategies. The VSI’s clear categorization of formation roles and return profiles enables family offices to understand exactly how venture studios fit within broader portfolio construction—whether as venture capital alternatives, private equity adjacencies, or entirely distinct return streams.
Principal Education: Family office principals often lack deep familiarity with venture studio mechanics. The VSI provides a structured framework for explaining how studios operate, what drives performance, and why certain operational choices align with specific return expectations. This educational function accelerates principal comfort with an unfamiliar asset class.
Governance and Reporting: Family offices require clear communication tools for investment committees and family governance structures. VSI reports provide standardized documentation that translates complex studio operations into digestible performance summaries suitable for board presentations and investment reviews.
The family office enthusiasm for VSI adoption suggests the framework successfully bridges the gap between venture studio complexity and traditional investment evaluation criteria.
What This Standard Means for the Ecosystem
The VSI release represents far more than new evaluation methodology. It signals a fundamental maturation of the venture studio model and its transition toward institutional acceptance.
From Bespoke to Systematic
Prior to the VSI, every studio investment required custom diligence frameworks. Investors developed their own metrics, studios reported using inconsistent terminology, and meaningful comparison across opportunities was nearly impossible. This bespoke approach limited institutional adoption to investors with sufficient resources to develop proprietary evaluation capabilities.
The VSI transforms this dynamic by providing systematic assessment methodology accessible to any investor regardless of prior studio expertise. When studios can self-report using standardized formats and investors can evaluate using consistent criteria, the entire ecosystem operates more efficiently.
From Experimental to Established
Asset classes mature when they develop standardized measurement, transparent reporting, and reliable benchmarks. Real estate has cap rates and NOI. Public equity has P/E ratios and EPS. Private equity has EBITDA multiples and IRR calculations. These standards didn’t emerge organically. They were developed deliberately and adopted through industry collaboration.
The VSI provides venture studios with equivalent standardization. Formation role categories establish clear subcategories within the asset class. Cost structure methodology enables transparent financial comparison. Performance metrics create consistent benchmarks for success measurement. This infrastructure moves studios from experimental investment thesis to established alternative asset.
From Constrained to Scalable
Capital flows most efficiently to transparent, comparable, understandable investment opportunities. The venture studio ecosystem’s fragmented evaluation landscape has constrained institutional allocation despite compelling performance characteristics. As the VSI gains adoption, this constraint loosens significantly.
Family offices that previously avoided studios due to evaluation complexity can now assess opportunities using familiar frameworks. Institutional investors that required extensive custom diligence can now screen efficiently using standardized reports. Funds of funds that struggled to compare studio opportunities can now construct diversified portfolios across formation roles and return profiles.
This increased capital accessibility should accelerate studio formation, enable larger fund sizes, and ultimately increase the number and quality of companies systematically created through studio models.
From Isolated to Interconnected
Common standards create network effects. As more studios adopt VSI reporting, investors develop deeper fluency with the framework. As more investors request VSI reports, service providers build tools supporting standardized data collection and analysis. As more data accumulates using consistent methodology, researchers can conduct meaningful comparative studies that advance collective understanding.
These network effects compound over time, gradually making VSI fluency an expected baseline competency for serious studio participants rather than an optional enhancement.
Implementation and Access
The Venture Studio Forum has designed a phased approach to VSI implementation that balances immediate accessibility with sustainable ecosystem development:
Open Methodology Release
The complete VSI whitepaper is now publicly available, documenting all frameworks, definitions, metrics, and evaluation criteria. Studios can immediately begin applying VSI methodology to self-assessment. Investors can incorporate VSI frameworks into their diligence processes. Researchers can leverage VSI standards in comparative analysis.
This open release ensures no artificial barriers constrain adoption while the ecosystem develops supporting infrastructure.
Formal VSI Report Generation
For studios, investors, and other interested parties seeking formal VSI assessment and report generation, the Venture Studio Forum is establishing a submission and review process. Studios complete a detailed data collection survey providing the information required for comprehensive VSI analysis. Completed VSI reports follow a standardized single-page format that presents formation role categorization, cost structure analysis, three-function assessment, and key performance indicators in a format optimized for investor review and comparison. Those interested in generating formal VSI reports should join the waitlist.
Community Feedback Integration
The VSI remains a living standard, subject to refinement based on practical application and stakeholder feedback. The Venture Studio Forum actively solicits input on framework clarity, metric relevance, and implementation challenges. Future versions will incorporate lessons learned from initial deployments while maintaining backward compatibility with earlier assessments.
This iterative approach ensures the VSI evolves alongside the ecosystem it serves rather than becoming static methodology disconnected from market realities. Anyone wishing to submit feedback on the VSI is encouraged to do so in the Venture Studio Forum member community. Membership is free and you can join at
https://www.venturestudioforum.org
Looking Forward
The Venture Studio Index release marks a beginning rather than a conclusion. The immediate priority is widespread adoption—studios embracing VSI self-assessment, investors incorporating VSI frameworks into diligence, and service providers building tools supporting standardized reporting.
As adoption expands, the VSI will enable increasingly sophisticated ecosystem analysis. Industry-wide benchmarking will reveal which formation roles achieve superior capital efficiency in specific sectors. Longitudinal studies will demonstrate how cost structures evolve as studios mature. Comparative research will identify operational patterns that correlate with portfolio performance.
This accumulating knowledge will refine collective understanding of what drives venture studio success, enabling more effective studio design, more targeted investor allocation, and ultimately more companies systematically created with greater efficiency and higher success rates.
The venture studio model has demonstrated compelling unit economics and portfolio outcomes across hundreds of implementations globally. What has been missing is the standardized evaluation infrastructure that enables capital to flow efficiently to the most promising opportunities. The Venture Studio Index provides that infrastructure.
Studios that embrace VSI standards will find fundraising conversations more productive, investors more confident, and performance comparisons more favorable. Investors who adopt VSI frameworks will screen opportunities more efficiently, conduct diligence more systematically, and construct portfolios more strategically.
The transition from emerging asset class to established alternative requires exactly this type of foundational infrastructure. The VSI’s release as an open standard represents a pivotal step in that transition—one that should accelerate capital deployment, improve studio outcomes, and ultimately increase the number of successful companies systematically created through studio models.
This article is part of a series of articles formalizing and defining venture studios as an asset class. These articles formed the basis for the Venture Studio Index whitepaper, providing a framework for comprehensive evaluation of venture studios. Matthew Burris and Neal Ghosh are the primary authors of the Venture Studio Index, Venture Studio Cost Structure Model, and the core frameworks within the Venture Studio Index. These frameworks are based on their work designing, building, and operating venture studios and Matt’s review of over 500 venture studios globally.