Venture Studio Model in Digital Health
I’ve been thinking a lot about the venture studio model lately. In digital health, Redesign Health is executing this model with many companies, and Atomic did this with hims&hers. The model has also gained some popularity in the biotech world with Roivant and BridgeBio, among others.
Basically the formula is:
Develop investment theses in un/under-addressed areas in healthcare ideally with a consumer focus and potential for recurring subscription revenue streams
Raise money from LPs
Invest in branding and experience design (maybe this step happens before by using a landing site to develop conviction in a given thesis with FB ad spend)
Recruit experienced (sometimes overqualified) operators who want to be CEO of a startup with equity upside
Acquire customers using Facebook/Google ad spending
Show initial potential for LTV to exceed CAC
Raise money from outside investors based on LTV proof
Rinse and repeat
Gain efficiencies across companies from studio model (??)
Create celebrity-backed SPACs to acquire the companies and take them public - like Atomic did with hims&hers
Perhaps the combination of branding, venture connections and experienced operators can be a winning formula. It just seems like it may be too good to be true. However, I am an optimist and will be exploring variations of this model further in future posts.