Our long term vision at Vault Fund is to be more than just a fund but to redefine how world changing innovation is brought to life. As a first in class platform, we’ve started using the term “company creation fund” instead of “venture studio” to more accurately describe our investment strategy. Our framework for investment requires that the entity we invest in must be a founder/co-founder of the companies in their portfolio. This is a term many biotech funds use to describe their work creating companies around new IP and we have adopted it as we feel it more accurately describes our investment requirements.
We’ve found that the term “venture studio” is too ambiguous and means different things to different people. In fact, we’ve seen creative agencies and accelerators describe themselves as venture studios, despite not being company founders and in some cases not even taking equity for their involvement in the companies. This is confusing to both the LPs and the company creation fund partners we speak with regularly.
This distinction is critical because we view the founding role our partners take as an important factor in driving the results we expect. These entities must have ground-level, founding ownership stakes. Company creation funds are entities that create their own portfolio of companies with founding roles at entry level valuations backed by resources and processes to go-to-market at faster speeds. Company creation funds by definition are designed to drive higher potential returns, faster just like we are.