October 26, 2026
Only if the studio is putting in real cash or real work, and only if its stake is earned the way a co-founder's would be. A studio that takes 30% to 50% or more of your company at formation, fully vested, for services and introductions has bought a large part of your company before it has delivered the work, and seed investors will ask why. If you want the studio's help, make the deal look like a co-founder deal: studio equity that vests over time or on milestones, committed cash in writing, IP assigned by everyone who works on the product, limited control rights, and a way to end the services without losing the company.
Key takeaways
A venture studio, sometimes called a startup studio or venture builder, creates companies rather than just investing in them. Some studios start with their own idea, validate it, and then recruit a founder to run it. Others take in founders who already have an idea. In either case the studio typically supplies some mix of the starting thesis, early product, design and engineering work, recruiting, shared services such as finance and legal, introductions to investors and customers, and sometimes cash.
That is a different bargain from a cash investor's. An angel or a seed fund gives you money, takes a minority stake and leaves the work to you. A studio is selling labor and access, and it's paid in equity, often a lot of it, at the moment the company is worth the least. Whether that's a good trade depends on how much of the work the studio really does and for how long. A studio that conceived the idea, staffs the first product team for a year and funds the company until its seed round is doing a co-founder's job. A studio that offers a part-time product advisor and a list of investor contacts is providing a service that would normally be paid for in cash or a small, vesting grant.
Ask any studio to show you, in writing, who will work on your company, for how many hours, for how long, and what cash it is committing. Then talk to founders of the studio's earlier companies, including companies that raised a seed round after the studio, and ask what the studio actually delivered and what the seed lead asked it to change. See How Do I Check Out a VC Before I Take Their Money? for the same kind of diligence.
There is no reliable market standard, and published figures come mostly from the studio industry itself, so treat them as reference points. A director at the Global Startup Studio Network wrote in 2021 that studios hold anywhere from 15% to 100% of the companies they found, averaging around 40%. Studios and studio-focused investors commonly describe stakes of roughly 30% to 50% at formation, and sometimes up to 60% for companies the studio takes on at the concept stage. By comparison, a standard accelerator deal takes a single-digit percentage for its fixed-percentage investment. See Should My Startup Join an Accelerator?
The percentage alone doesn't tell you whether a deal is fair. What matters is what the studio pays for it in cash and work, whether it vests, and what control rights come with it. A 40% stake for a studio that originated the idea and funds the first year can be easier to justify than 20% for introductions.
Example. Two founders form a company with 10,000,000 authorized shares and a 1,000,000-share option pool. They issue 9,000,000 shares. Under the studio's standard terms, the studio takes half of them, 4,500,000 shares, fully vested, in exchange for services and introductions, and the two founders split the other 4,500,000, 2,250,000 each, on four-year vesting with a one-year cliff.
The company then raises a seed round that sells 20% of the company, and a Series A that sells another 20%. The charter is amended at the seed round to authorize more shares, as it usually is. To keep the math simple, the option pool isn't increased, which is optimistic.
| Holder | At formation | After seed | After Series A |
|---|---|---|---|
| Studio, 4,500,000 shares | 45.0% | 36.0% | 28.8% |
| Two founders, 4,500,000 shares | 45.0% | 36.0% | 28.8% |
| Option pool, 1,000,000 shares | 10.0% | 8.0% | 6.4% |
| Seed investors, 2,500,000 shares | 20.0% | 16.0% | |
| Series A investors, 3,125,000 shares | 20.0% | ||
| Total fully diluted shares | 10,000,000 | 12,500,000 | 15,625,000 |
Each founder holds 14.4% after the Series A. The founders and the pool together hold 44% going into the Series A, and the studio holds as much as both founders combined.
Now suppose the studio stops contributing after twelve months. Its 4,500,000 shares are fully vested, so it keeps all of them. If one of the founders left at the same point, the company could buy back 1,687,500 of that founder's unvested shares at cost, and the founder would keep 562,500, a quarter of their stake. The person who keeps working is held to vesting. The studio that walked away isn't.
Compare a restructured deal. The studio takes 1,500,000 shares that vest over four years with a one-year cliff, tied to its services, and the founders take 7,500,000. At formation the founders hold 75%, the studio 15% and the pool 10%. After the same seed round and Series A, the founders hold 48%, the studio 9.6% and the pool 6.4%. If the studio stops contributing at month twelve, it keeps 375,000 vested shares and the company can buy back the other 1,125,000 for $11.25 at the $0.00001 par price. See Equity Dilution and What Happens to a Co-Founder's Equity When They Leave?
Fully vested studio shares. Some studio deals describe the studio's partners as co-founders while issuing the studio's stock fully vested at formation. Co-founders vest. If the studio's people are acting as co-founders, the studio's shares should be subject to the same kind of restricted stock purchase agreement and repurchase right as yours. Shares for work the studio has already delivered, such as a validated concept, a prototype or IP it assigns to the company at formation, can fairly vest at issuance, the way a founder can get vesting credit for work done before incorporation. The rest should vest as the work is done. See Vesting Schedule.
Missing IP assignments. The studio's partners, employees and contractors may write your code, design your product and shape your patent filings, but they work for the studio, not for you. The services agreement should assign to the company, in present-tense language, everything created for it, and the studio should confirm that each person who works on the product has assigned their rights to the studio, or have them sign directly with the company. A studio partner acting as a co-founder should sign a CIIAA with your company like any other founder. Watch also for the studio's reusable platform, such as shared code libraries, templates and tooling. If the studio keeps ownership of those, get a perpetual, irrevocable license to whatever is built into your product, and make sure it survives the end of the services agreement and a sale of the company.
Control at formation. Studio deals often include a board seat or two, consent rights over financings and new hires, and sometimes the right to replace the CEO. A studio with a majority of the votes, a contractual right to elect a majority of the board, or at least a third of the votes plus managerial control may also count as a controlling stockholder under Delaware's Section 144 as amended in 2025, which means its own deals with the company need special approval to be protected. See How Do I Build an Early-Stage Startup Board? and Fiduciary Duties of Startup Founders.
A services agreement you can't leave. If the studio both owns a large stake and supplies your product team, ending the relationship can mean losing your team, your code and your board majority at once. You need a right to end the services on reasonable notice, a transition period, and a clean handover of code, accounts and documentation.
Studio fees paid from your cash. Some studios charge monthly service fees on top of their equity. If the studio's "investment" is paid back to the studio as fees, it isn't adding runway. Fees paid to a studio whose partner sits on your board are an interested transaction and should be approved by directors who aren't affiliated with the studio.
Seed investors underwrite the founders, and they want the people doing the work to own enough of the company to stay motivated through several more rounds of dilution. A large studio stake can read as dead equity, ownership held by someone who no longer contributes, especially if the studio's involvement tapers off after launch. One early-stage investor's widely shared rule of thumb treats a founding team plus option pool holding less than 50% after the seed round as dangerous territory. In the example above, the founders and pool hold 55% at formation but only 44% after the seed.
Plenty of studio companies raise money, and companies from well-regarded studios can attract investor interest. But expect a lead investor to ask the studio to restructure a large stake as a condition of investing. Common requests are for the studio to put part of its stake back on vesting, sell or contribute some shares back to the company, drop its board seat or consent rights, amend the services agreement and confirm the IP chain. If your fundraising plan depends on the studio agreeing to those changes later, you've left the hardest negotiation for the moment when you most need the money. See Startup Due Diligence.
Vesting or milestone earn-in. Put the studio's stock on a restricted stock purchase agreement with time-based vesting that tracks the services, or performance vesting tied to defined deliverables such as a shipped product, a pilot customer or a closed seed round. Unvested shares should be repurchasable at cost when the services end.
Cash in writing. If the studio promises funding, document it as a committed investment with an amount and dates, not a promise in a pitch deck. Use the YC post-money SAFE for the cash, unmodified, with any agreed changes in a side letter. See SAFE.
IP from everyone. Present-tense assignment of all work product from the studio, written confirmation that every studio person has assigned their rights, CIIAAs from studio partners who act as founders, and a license to any studio platform code.
Governance limits. A board seat, if any, that ends at the first priced round or when the studio's ownership drops below an agreed level, no veto over financings or hiring, and no right to replace the CEO.
Buyback rights. A company right to repurchase unvested studio shares at cost, and, if you can get it, a right to buy back some vested shares at fair market value if the studio ends its services early.
Financing cooperation. A commitment that the studio will vote for, and sign the documents for, a priced round on terms the board approves.
If the studio is mainly an investor, treat it like one: cash on a SAFE with a cap that fits your stage, and no services equity at all. If it is mainly a build shop, pay for the work in cash, deferred fees or a capped equity grant that vests with the work, the way you'd pay a senior contractor or advisor. See Startup Contractor Agreement and Startup Advisor Compensation. If the studio truly is your co-founding team, give it co-founder equity on co-founder terms: vesting, a CIIAA from each person and the same repurchase rights everyone else has. See Founder Equity: How To Split Equity Among Co-founders.
Many studios use one template for every company and say the terms aren't negotiable. That is useful information. A studio that won't put its equity on vesting or put its cash commitment in writing is telling you how it will behave when your seed lead asks it to restructure.
For more, see 6 Types of Investors in Startups, What Are Protective Provisions? and Restricted Stock Purchase Agreement.
If a studio has offered you a deal, contact us before you sign the term sheet.
