A venture studio carry waterfall, explained in one line, is the ordered set of rules that decides how exit proceeds get split between the studio, its investors, and you — the founding team — typically returning invested capital first, paying a preferred return, then dividing the profits known as “carry.” It refers to the sequence
Picture this: You just raised $2M in seed funding. The champagne has been popped, the press release sent, and your LinkedIn is flooded with congratulations. Fast forward six months — you’re burning $150K per month, your product roadmap is a mess, and you still haven’t figured out how to consistently close enterprise deals. The money
Venture studios make money for LPs through a fundamentally different model than traditional VCs — they build and de-risk companies from inception, typically capturing 20-50% equity stakes while reducing failure rates from 90% to 60-70%. This operational approach generates returns of 3-5x compared to the VC industry average of 2.5x, primarily because studios control more