As a startup studio known for supporting B2B SaaS companies with a focus on rapid profitability, Rule1 Ventures has managed to secure funds amidst a challenging fundraising environment.

Here are our top five take takeaways from the session:

1. Diversify your funding sources: Relying on a single source can put your venture studio at risk. It’s essential to tap into multiple funding sources to ensure stability.
2. Raise more than you think you need: Ehrlich stressed that, in order to seize opportunities, it’s wise to raise at least two or three times more than what you think you need.
3. Cultivate relationships with potential investors: Regular follow-ups and updates are necessary to keep potential investors interested and informed about your progress and accomplishments.
4. Stay true to your mandate: While keeping investors happy is key, don’t lose sight of your mission, and maintain flexibility and optionality for the best results.
5. Design your fund with optionality in mind: A flexible fund structure allows your venture studio to adapt to new opportunities and markets, without backing yourself into a corner.

Ehrlich also offered valuable advice on actualizing a venture studio’s fund, such as setting the right minimum and maximum investment amounts, choosing between open-ended or closed-end funds, and what to look for in ideal investors. The significance of a strong pitch deck was emphasized, focusing on detailing the who, what, where, when, and how aspects of the studio.

He also delved into the structure of venture studios and how they can offer a more attractive business model to investors, thanks to their increased flexibility and control. 

Trust, fairness, and balancing profitability with growth potential were among the essential elements discussed when dealing with investors. Transparency with the investors was highlighted as a crucial factor, with Todd mentioning the use of an investor portal, which has been a game-changer for Rule1. This portal allows investors to easily access portfolio companies’ financial updates, product roadmaps, and sales data, helping them track growth, revenue, and returns on their investment.

Ehrlich’s insights on fundraising for venture studios offered valuable lessons for those navigating the venture studio world. Adopting an evergreen structure, focusing on profitability and growth potential, and maintaining trust and transparency with investors are just a few examples of the insight he shared. GSSN venture studio boot camps run multiple times a year, if you would like to sign up for the next cohort then click here to learn more.