How to differentiate Venture Builders from Incubators or Accelerators?

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While there is some overlap between the business models, there are important differences between Venture Builders, Accelerators, and Incubators. Here are the main differences:

Incubators support entrepreneurial projects from the creation of the startup, usually in the Pre-Seed (when there is an idea to be developed) or Seed (when the startup already has an MVP) stages. They contribute to the development of the startup from the beginning through mentorship and offer administrative services and office space to help early-stage companies establish and grow. Incubators have various sources of revenue, including rental fees, participation fees, equity stakes, revenue sharing, and even charging for the administrative services they provide.

Accelerators, on the other hand, are organizations that support projects in a more advanced or growth phase, where the startup already has a validated business model, a consolidated team, and revenue derived from its early customers. The contribution of Accelerators is limited in time (typically 3, 6, or 12-month cycles) and they work in specific areas where the company needs the most help. They offer training for entrepreneurs and, in some cases, may facilitate a co-working structure. Accelerators also help projects raise funds and usually take a 5% to 15% equity stake in the company.

Within the universe of Venture Builders, it is possible to identify two distinct models. The first is commonly known as a “startup factory,” focused on conceptualizing, creating, developing, or replicating new businesses. In this model, the Venture Builder provides support in all areas of the business, including product development, marketing, sales, recruitment, finance, and access to investors.

Once the business plan is defined, the Venture Builder will choose and form the team, as well as provide a physical and administrative structure for the startup to start its activities. In this model, the Venture Builder usually holds a majority stake in the company it created.

Although known for creating new businesses, Venture Builders also offer valuable support to advanced-stage companies that want to grow and scale their operations more efficiently. With a team of entrepreneurs and experts, they provide a wide range of services that help companies stand out in the market and increase their profitability.

They work closely with companies to identify their strengths and areas that need more attention. Through personalized strategic planning, they provide specialized support to help companies accelerate their growth.

The support offered by a Venture Builder usually lasts 2 to 4 years, during which they work together with the companies to develop a strong growth strategy and successfully implement it. The ultimate goal is to increase the company’s profitability and prepare it for long-term success.

The compensation for the Venture Builder consists of a retainer fee and an equity stake in the company, typically around 5% to 10%. This means that the Venture Builder has a financial interest in the company’s success and works to ensure it achieves its financial goals and grows sustainably.

In summary, Venture Builders are capable of helping advanced-stage companies grow and scale their operations more efficiently. They provide support in key areas such as product development, marketing, sales, international expansion, and fundraising, and their compensation is based on a retainer fee and an equity stake in the company, aligning their financial interest with the long-term success of the company.

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