How we work with Entrepreneurs

How we work with Entrepreneurs

Metabolic Ventures is a non-profit foundation that builds new companies that have the potential to have a transformational impact on society. The entrepreneurs we work alongside to build these ventures are one of the most important components of that process.

Ventures we build start from a challenge worth solving

There are many new impact ventures worth building, some more than others. Our approach starts with a deep understanding of the challenges we aim to solve so that we’re certain that we’re putting our efforts towards addressing the most important problems.

We build steward-owned, scalable ventures

Steward ownership is an approach to legal governance and financing that enshrines the purpose of the venture into its legal DNA. It has significant implications for the decision-making and financing of a venture, such as capped returns for founders and investors and retaining the ownership of the venture in a foundation or trust. To learn more about steward ownership, read Purpose’s explanation of the implications for governance and financing.

We build ventures within a studio structure

Metabolic builds ventures within a “studio” structure, a type of venture building approach that builds ventures from scratch and provides a lot of the necessary support to ensure that they thrive. In practice, that means that Metabolic Ventures will serve as co-founder in the ventures it builds, working day-to-day with the founding team. To learn more about venture studios, read GAN’s whitepaper on the Rise of Startup Studios.

Our key principles:

Entrepreneurship is an activity and a mindset, not a profession

FromResearch does suggest that experienced entrepreneurs are more likely to create a successful venture than their inexperienced counterparts. But the infrastructure of a studio and its collective expertise help to mitigate that disparity, and we see tons of potential in people from recent graduates with a powerful drive to skilled scientists with the goal to scale the impact of their work to experienced professionals looking to make a dramatic career shift. Entrepreneurship comes from within, and we’re open to working with a diverse set of individuals.

Mission alignment is critical

Building a successful venture is really hard. Building a successful venture that seeks to address complex challenges to create a transformational impact on our economic system is even harder. We look for people who share our mission to transform the current system and who are so passionate about the topic that they couldn’t imagine doing anything else.

We look for people who look for insights

The narrative of the lone genius with a “lightbulb” moment is powerful and compelling. But the reality of addressing complex challenges using scalable enterprise requires open-mindedness and a relentless and methodical search for new information, much of which is likely to disprove initial ideas and assumptions. Moving past the ego in pursuit of working solutions is an essential personality trait.

Does our philosophy align with yours? If you are interested in our process, would like to learn more, or just want to chat, we would love to hear from you. If you have more questions, check out our FAQ below.

FAQ

How do entrepreneurs enter your process?

Entrepreneurs can enter our process in three ways, annotated in the graphic below.

By attaching themselves to an idea

The first is within what we call an “idea-centric track”; Entrepreneurs can enter our process by attaching themselves to an idea that has been initially validated by the studio. The product, business model, partners, and strategy are likely to change significantly as development gets underway, but essentially entrepreneurs are attaching themselves to an idea that has already been formulated following extensive due diligence by the studio.

By attaching themselves to the studio

The second is within what we call a “people-centric track”; Entrepreneurs who have a relevant skillset and share an objective aligned with our focus area (which is currently set around the transition to a sustainable bioeconomy) can generate ideas along with us or shape their existing ideas so that they align with our work on mapping the challenges and dynamics of the space.

By attaching themselves to a founding team

Lastly, an entrepreneur can be attached to a founding team as a 2nd, 3rd, or in some cases 4th member. Different founding teams need different balances of skills. After a first co-founder comes on board, the typical process is to identify a second co-founder who complements their skillset, has a strong affinity with the direction of the venture, and with whom there’s a good personal connection.

What do you look for in the entrepreneurs you work with?

Typically, we look for the standard startup duo of a technical co-founder and a commercial co-founder. We usually look for the technical co-founder first, as the studio (and a specific person within the studio) also serves as a co-founder and can fill quite a few operational and commercial gaps. But we’re not dogmatic about that duo or order of operations; it’s just a norm. Certain ventures may need different setup; for example, a business model innovation may not require deep technical expertise, and a joint venture or close partnership with an established sales channel may suggest a more operational co-founder than a commercial one.

In individuals, we look for people with the right mindset and drive that makes them suitable for being part of the founding team of an ambitious venture, a mission-alignment that ensures a shared passion and commitment, and an open and curious mind that is essential for addressing difficult problems with commercial solutions. We also look for great communication skills and an ability to think outside the box.

I already work closely with someone. Do you accept existing teams?

In general, yes we do. Having a great existing working relationship with someone is a huge asset and we trust the entrepreneurs we work with to largely know what they need and how they like to work. 

That said, as we are a studio and not an accelerator, we are working alongside founding teams to build ventures from scratch, meaning that existing teams may have to unwed themselves from previously held assumptions or ideas.

How much control do I have in the studio model?

All ventures we build will follow a steward ownership model, whereby the majority of the venture is owned by a stewarding foundation.

Entrepreneurs who build a venture with us start with an equal say regarding the strategy and operations of the venture. As a venture matures, founding entrepreneurs start to gain autonomy from the studio. Entrepreneurs will be the executives of the venture and also be on the board of the foundation that stewards the direction of the venture.

How do investment and returns work within the ventures you build?

We break down investment and returns in three categories:

  • Entrepreneurs
  • Investors
  • Metabolic Studio

Entrepreneurs receive a capped return; a portion of pre-tax profits go towards paying into this return until the cap is reached. Entrepreneurs also receive a salary as an executive in the venture, and can join an employee share pool where they can receive a share comparable to other employees.

The form of investment taken by the venture, or whether investment is needed at all, is a case-specific decision taken by the venture in cooperation with the Studio. We recommend that ventures prioritize structuring revenue-based, capped returns for any capital infusion, but there are multiple financing models that are in line with steward ownership principles. It’s also possible for a venture to provide an equity stake to a third party investor, granted the investor is mission-aligned and that the stewarding foundation that owns the venture never sees its stake drop below a majority.

Metabolic Studio acts as both an entrepreneur and an investor. We deploy a dedicated co-founder from the Ventures team, broader support services from the broader Ventures team and Metabolic Ecosystem, early stage capital, and long-term stewardship and guidance.

Will entrepreneurs be paid while they’re building a venture in the early phases?

Month 0 - 1 Month 1 - 3 Month 4 - 18 Month 18 -
Understanding Leverage Points & Generating Ideas Validating an Idea Validating Problem-Solution Fit Validating Product-Market Fit
In-Kind Stipend Salary Expanded Salary
In the earliest period, you provide your time in-kind to make sure that there's broad alignment with us and the venture. While working on early validation efforts, typically part-time, we’ll provide you with a stipend to cover your basic costs. Once there’s a go-decision on building the venture, capital will be deployed and you can count on a base salary. Upon raising investment or obtaining significant early revenue, the salary will be expanded to a more competitive level.

Yes. While skin in the game is critical, we believe that it’s important for entrepreneurs to be able to focus squarely on building a successful venture instead of worrying about how they’re going to pay their bills next month. Specifically, financial compensation works generally as follows: