Why venture builders fell out of favor among founders

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Hi readers,

Since it was Father’s Day yesterday, here’s one of my favorite dad jokes from Reddit: “I took up origami for a while, but I gave it up because it was too much paperwork.”

I’m not sure if dad jokes were ever uncool before, but they’ve definitely become a sensation on social media in recent times. But we can’t say the same about venture builders, though: after enjoying a period of popularity a few years ago, it’s been slowly losing favor with founders. What’s up with that?

Today we look at,

• Why venture builders have fallen out of favor with founders
• A NLP startup that raised money
• Other newsy highlights such as Tata Digital’s plan to build a neobank and Paytm’s goal to go public this year

PREMIUM SUMMARY

What’s up with venture builders?

As the name suggests, venture builders (VBs) are organizations that help founders develop their startups by providing resources such as co-founders, funding, mentors, and generous monthly stipends. One example of a VB is Rocket Internet, which launched Zalora and Delivery Hero, the parent company of Foodpanda.

• Bill the builder: The history of VB goes all the way back to 1996, when American investor Bill Gross established Idealab, the world’s first venture builder. Between 2002 and 2013, VBs’ popularity soared as their number grew by 625%.
• Out with the old: New approaches to venture-building are also emerging, and cohort-based VBs have been getting more attention. Unlike pure-play VBs that pour all their resources on one or a few ventures, cohort-based VBs take in a large batch of startup founders and prepare them for a demo day.
• Houston, we have a problem: While a cohort-based approach allows more founders to take part in VBs, it also means that resources are spread more thinly. This has led to founders feeling frustrated and dropping out. And it’s not just the founders – mentors and corporates also leave when they see no benefits.

Read more: Why some founders shun venture builders

STARTUP SPOTLIGHT

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