Thesis Paper

THESIS PAPER The Startup Studio as a form of Business Model Innovation. A comparative study on the case of Founders Copenhagen as a Startup Studio, compared to more traditional models of Venture Capital Funding. Abstract The purpose of this research paper is to assess the value of a relatively new form of venture capital funding, The Startup Studio, which offers a new approach to financing and supporting ventures in their early stages. In order to gain a comprehensive analysis of the new form venture funding compared to traditional models, this research adapts theories of Business Model Innovation, Pluralistic Leadership and Innovation Management, as a way of showing the value-adding benefits of the Startup Studio model. Using the case study of Founders, a Danish startup studio based in Copenhagen, this research will show, through primary data gathered at the company, that the startup studio business model offers young ventures a much more stable and attainable form of support, in the processing of launching a startup. The reader will see that traditional models of funding are not only unattainable for many early stage startups, but also that their extreme growth models can be considered damaging to venture longevity. David Michael Jackson [email protected] Table of Contents 1 Introduction ......................................................................................................................................... 3 1.1 Problem Area And Motivation .......................................................................................................... 5 1.2 Problem Formulation ........................................................................................................................ 6 1.3 Background of Founders ................................................................................................................... 6 1.4 The Founders ‘Platform’ ................................................................................................................... 7 1.5 Thesis Structure ................................................................................................................................ 9 1.6 Project Criticism .............................................................................................................................. 10 2. Methodology ..................................................................................................................................... 10 2.1 Methodologic Approach ................................................................................................................. 11 2.2 Research Philosophy ....................................................................................................................... 11 2.21 Hermeneutics ................................................................................................................................ 11 2.22 Classical Hermeneutics ................................................................................................................. 12 2.23 Modern Hermeneutics .................................................................................................................. 12 2.24 Reasoning for the Modern Hermeneutic Approach ..................................................................... 13 2.25 Implications and approach of adopting a Hermeneutic Approach ............................................... 13 2.3 Research Design .............................................................................................................................. 14 2.3.1 Nature of Research Design........................................................................................................... 14 2.3.2 Methodological Choice ................................................................................................................ 15 2.3.3 Strategy ........................................................................................................................................ 16 2.3.4 Time Horizon ................................................................................................................................ 17 2.4 DATA COLLECTING METHOD ........................................................................................................... 18 2.4.1 Primary Data ................................................................................................................................ 18 2.4.2 Data Collecting Process (primary data) ........................................................................................ 19 2.4.3 Secondary Data ............................................................................................................................ 20 2.5 Quality of Primary Research Data ................................................................................................... 20 2.5.1 Quality of Secondary Research Data ............................................................................................ 21 3. Conceptual & Theoretical Framework .............................................................................................. 22 3.1 An overview of the Traditional Venture Capital Model .................................................................. 22 3.2 Overview of The Startup Studio ...................................................................................................... 24 3.3 Business Model (BM) & Business Model Innovation (BMI) Theory ................................................ 26 3.3.1 Business Model Theory ................................................................................................................ 26 3.3.2 Business Model Innovation Theory .............................................................................................. 29 3.3.3 Drivers of Business Model Innovation: ........................................................................................ 30 3.3.4 How Business Model Innovation Occurs In Practice:................................................................... 31 3.4 Pluralistic Leadership Theory .......................................................................................................... 32 3.5 Innovation Management Theory .................................................................................................... 35 4 ANALYSIS ............................................................................................................................................ 37 4.1 A comparison of the Value-Added Benefits of the traditional Business Models of Venture Capital funding and the Startup Studios Business Model. ................................................................................ 37 4.1.1 The Value-added benefits of traditional VC funding ................................................................... 37 4.1.2 The Value-added Benefits of the Angel Investor Model .............................................................. 39 4.1.3 The Value-added Benefits of the Startup Studio Model .............................................................. 40 4.2 Business Model Innovation. From Investment to Involvement: the shift in form of VC Funding leading to the birth of the Startup Studio Model. ................................................................................ 42 4.3 Founders ‘Pluralistic Leadership’ Model. ........................................................................................ 45 4.4 Innovation Management at Founders ............................................................................................ 47 6. Discussion .......................................................................................................................................... 49 7. Conclusion ......................................................................................................................................... 51 References ............................................................................................................................................ 54 Appendices ............................................................................................................................................ 58 Appendix 1 – Stages of Venture Capital Financing ............................................................................... 58 Appendix 2 – Founders Business Model (Founders 2018) .................................................................... 59 Appendix 3 – Startup Studio Basics (Quora, 2015) ............................................................................... 60 Appendix 4 – Interview with Sebastian ................................................................................................ 61 Appendix 5 – Interview with Talika ....................................................................................................... 80 Appendix 6 – Participatory Observations – ’Beers and Cheers’........................................................... 97 Appendix 7 – Study Progress Description ........................................................................................... 101 1 Introduction Due to today’s fast paced and turbulent startup climate, one in which Forbes claim a startup failure rate of around 90% (Forbes 2015), entrepreneurs developing hi-tech innovations are faced with a multitude of challenges, most importantly, the challenges of acquiring funding, the strategic execution, as well as the expertise necessary in the process of taking a novel idea into a

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