1.1 Overview
The Polkadot ecosystem has one of the most differentiated technologies in web3, and enjoys one of the most active developer communities in crypto. Yet, challenges in poor UX, the high learning curve of substrate, the cost of parachain auctions, and the lack of stablecoin volume are some of the reasons that have stopped the Polkadot ecosystem from seeing explosive growth in dApps and users base.
We propose to address these pain points through the launch of the Polkadot Venture Studio; a venture program that will launch protocols and dApps on polkadot that we all want to see grow. It will be providing access to a network of peers, mentorship, expertise, and resources to help incubate, accelerate and fund their projects.
Polkadot has a number of initiatives currently live such as an Acceleration program with Outlier Ventures and a Fellowship Program PBA. These programs are “pull” strategies, designed to attract the best talent, help find the right ventures to build and help them navigate the first months of life of their journey. However, what the ecosystem is lacking is more ‘push’ initiative - a set of targeted and more laser focused initiatives.
The Polkadot Venture Studio is a push strategy, a tool for the foundation and ecosystem to drive the agenda of what they want to see built for the ecosystem: billion dollar, VC fundable protocols and companies, or critical tooling to develop the ecosystem. It adds a differentiated strategy with focus on delivering 5 ventures per cohort that the venture studio and the broader community have agreed are critical applications to build.
The main goals to achieve for the Polkadot Ecosystem through a venture studio model are:
- Driving killer uses cases: Define and develop 5 ventures per cohort driving the adoption of Dotsama technologies
- De-risk ventures: Venture studio model reduces early stage risks: team, early execution and go-to market.
- Decentralize Parity / Polkadot team: Establishing the right ownership and incentive to develop a venture ecosystem.
The Polkadot Venture Studio will be operated by Elixir Capital, an early stage web3 investors and acceleration platform. Elixir Capital was founded by a team of investors, researchers, and entrepreneurs with significant first-hand experience from Outlier Ventures, Rocket Internet, Visa Ventures, and other traditional finance and technology ecosystems. As a team we have been involved in 21 web3 acceleration programs, so we bring well-rounded and complementary early stage experience to the Polkadot Ecosystem.
1.2 Details
Venture studios have been around since the early days of the internet, fulfilling a specific job: bootstrapping a local ecosystem and helping early stage capital find the right founder-problem combo to create local champions. Today, they are more commonly used by corporations to help them spin out businesses that they recognize cannot develop internally or capture disruptive technology. From 2018 to 2023, the number of startup studios has doubled to 877. Source
According to recent research, startups created in venture studios achieve seed funding twice as fast and exit 33% faster than conventional startups. Our experience as investors and entrepreneurs operating in this model has shown us that venture studio built companies get traction faster and have a higher probability of survival.
1.2.1 What it is and what it is not
Venture studios vary significantly in their models and operational scale. This is an approximation of the most common models and examples of ownership equity/ token split.
- Incubation:
- Description: The simplest form of a venture studio typically consists of a small team, often around three people. This core team is tasked with defining the project’s scope through Requests for Proposals (RFP) or Requests for Startups (RFS), recruiting suitable talent, and managing the overall program.
- Support to the founder:
- Stipend for founders during 6 months ($3k-$5k per month).
- Ownership split: 5% studio / 95% founders
- Studio:
- Description: Mid sized ventures studios include function leads (CPO, CMO, CTO, and a few engineering functions) that are split across all cohort ventures and support teams while they recruit. This helps keep the pace, de-risks execution further, increases talent attraction capabilities and keeps the knowledge within the ecosystem.
- Support to the founder:
- Stipend for founders during 6 months ($3k-$5k per month).
- Interim team members (CPO, CMO, CTO, CSO) in the launch ventures.
- Pre-seed capital to launch POC.
- Ownership split: 15% studio / 85% founders
- Builder:
- Description: Larger venture studios may employ teams of 20 to 40 members. On top of fulfilling the functions of the incubation team, these extensive teams are involved in more hands-on roles, such as initiating and developing early stages of ventures, constructing portions of the technological infrastructure, and mitigating operational risks. Builders also have a track record of success and therefore a network of friendly investors that have very high chances of providing all the necessary capital to series A.
- Support to the founder:
- Stipend for founders during 6 months ($3k-$5k per month).
- Interim team members (CPO, CMO, CTO, CSO) in the launch ventures.
- Seed capital necessary to get first traction / get to first external fundraise.
- Ownership split: 30% studio / 70% founders
For our inaugural program, we intend to launch with a set of five companies under the lighter model of a venture studio: the incubation studio. This strategy is chosen for its efficiency in capital use, minimizing the equity stake required from the Polkadot Startup Studio, and leveraging the available network of entrepreneurs and builders within the ecosystem. This initial approach allows for a more streamlined and cost-effective operation. However, future cohorts might follow a different path, potentially necessitating additional funding and investments from entities like the Web3Foundation, the Polkadot treasury, or the wider venture capital community and Elixir Capital’s investor base. This flexibility in operating models allows us to adapt to the evolving needs and dynamics of our ventures and the broader market.
1.2.2 Program detail
The Polkadot Venture Studio 1st cohort program essentially consists of four stages:
- RFS (Request for startups): Ideation and publishing of models to pursue and build. We take inspiration from other ecosystems and even industries.
- Announcement: Serves as the marketing phase which attracts press, builders, users and capital to the ecosystem. Includes ongoing media and content strategy.
- Talent: We have seen excellent founders come from multiple backgrounds. Finding the perfect founder-problem fit is what we are solving for. We are de-risking the team at this stage.
- Launch: The initial cohort of companies is launched with milestone deadlines every 6 months until they reach the stage of external funding, where the program is finished.
1.2.2.1 RFS
Polkadot Venture Studio must select the best fit start-up ideas to launch by using Elixir’s proven startup evaluation framework which has been implemented and improved over 200 times. It includes a rigorous investment criteria and an evaluation of the potential of each team and the product or technology that they are building.
Methodology
Our process will follow a specific set of steps to ensure that we are well-positioned to provide support internally and externally, and that we are tracking the progress of each team from start to finish.
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Evaluate Potential: finding the overlap of technology capabilities and emerging trends in early stage protocols and companies in web3
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Polkadot ecosystem technology potential
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Mapping of major tech and business trends
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Shortlist: defining a shortlist of RFS with internal stakeholders. Most of the good ideas are already being discussed within the Polkadot community.
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Expert ecosysten and industry interviews
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Organization of topic-specific brainstorming sessions using the GIST and other frameworks and idea matrix with group of experts or entrepreneurs in residence
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Promotion of an idea submission form Polkadot forums and community though OpenGov.
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Area Analysis: researching and compiling lists of interesting projects and ideas in specified areas.
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Venture Analysis: monitoring, collecting, and generating ideas from venture sources with the Polkadot VC ecosystem.
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Approval: success is not found only in the best possible ideas. It requires excitement and passion from the Venture Studio team, investors and the community, who will work closely with these new teams.
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Venture Studio & Web3Foundation
A note on the selection process. The first cohort of RFS may suffer changes while ventures develop. The first months of venture development require a lot of research, so we must be ready to pivot into similar but alternative ideas. Under no circumstances this selection process must take authority away from the founding team members regarding where they want to take the company / protocol.
RFS topics of interest
Following is a list of domains and concepts that can be a great place to start shortlisting the RFS:
- Dev Tooling
- Censorship Resistance
- Appchain Infrastructure
- Bridges
- Data DAOs
- ML storage
- Distributed GPU compute networks
- Data availability service
- ZK proof compute and storage
- Climate Tech
- Carbon credit tokenization
- Capital Markets Infrastructure & DeFi
- FX trading venues for stablecoins in Africa, Latam, SEA
- Derivatives trading facilities
- Bridging
- Hardware collateralized lending
- DeFi credit insurance
- RWA Tokenization
- Social & Community
- Appchain infrastructure and
- Gaming
1.2.2.2 Announcement
This is the first marketable event in the program. This stage will bring attention from both talent and investors to the program and the broader Polkadot ecosystem.
1.2.2.3 Team
De-risking the teams is one of the most valuable contributions of venture studios. Finding the perfect founder-problem fit and finding a proper personal fit across the founding team is critical to ensure the viability of the company through the first 12 months. studio startups reach seed rounds twice as quickly compared to conventional startups (1.49 vs 3.03 years). 41% less time to Series A (2.75 vs 4.68 years), 44% to Series B (3.7 vs 6.65 years), and 47% to Series C (4.59 vs 8.67 years). Source.
These are the typical sources where we find great talent:
- Insiders: They have been lurking in the shadows for some time. Most likely, they have been at the core team of the Protocol, now ready to solve a problem that has been bugging them for some time.
- The Industry specialist: Industry specialists, mostly with no technical background who understand the industries problems very well, but have no access or network to web3. They can make commercial strategy and growth seem like magic. They have an exceptionally clear mind, can make even the complex things seem like a no-brainer, they are one of the most well-connected people you may know.
- The builder: Relentlessly focused on shipping beyond all else, they can be found frantically going between Code, Stackoverflow and Discord. They default to sprints and want to know why things aren’t possible.
- The Academic: The ones who talk in abstract terms and never stop talking about their current obsession. They seem to know what they are doing but a few minutes into the conversation you are already lost in the void of technicalities.
Many teams may also require skills in the founding team they were not aware of as they advance through the first stages of the venture development process. This is why the initial incentive (equity and token) setup with proper vesting periods is critical during the first months.
1.2.2.4 Launch
The Launch phase is where we get to work. Our methodology helps teams streamline most of the tasks needed to get off the ground fast and secure the initial capital.
Setup
The Venture Studio team supports founders in the first months of setting up entities covering the following sections on a case by case basis.
Ideation and Experimentation
Our approach to venture building is based on 15 years of operational experience of our members in various accelerators and venture builders, both as operators and as program leads.
When building new ventures, we are dealing with uncertainty, and the best (and maybe only) way to solve uncertainty is through small iterative steps that clear out high impact and high value assumptions of the venture in play.
Different problems will require different tests and experiments. We take inspiration of many method driven approaches to clearing uncertainty from value generation such as the following:
- Steve Blank’s lean startup methodologies. Old but still great.
- Dan Olsen’s work on MVP definition, and customer-Value maps.
- Alex Osterwalder’s business model canvas.
- Brian Balfour’s product model, which highlights that entrepreneurs need to seek the interaction of fit between Market ⋂ Product ⋂ Channel ⋂ Model to achieve sustainable success.
- Marty Cagan’s frameworks to assess product opportunities.
- Teresa Torre’s opportunity-solution trees and other product discovery techniques.
- Google Ventures’ design sprints.
- Clayton Christensen’ Jobs to be done framework.
Network Mapping
Alongside the setup assessment and early iteration and experimentation, we will provide the teams with a tailored network map that clearly displays the relevancy and proposed impact of engagement that element of the network could have on the portfolio company.
We will focus on partners in the Web3 ecosystem - impactful protocols, investors, mentors, projects, etc … where Elixir Capital and the Polkadot ecosystem can facilitate introductions.
Key Areas of Support
The assessments above will ensure we can build a tailored and impactful program calendar, structure and partner network. It is our job to make sure teams get the most value out of the program and the provided resources.
Our regular check-in and office hours will keep the start-ups aligned and give us the opportunity to ensure that each start-up is tracking on their goals .
In the event where we see an upcoming red flag which could prove to have a significant impact on the startup’s progress, we will dedicate our resources to mitigation and then recalibrate their action plan. These potential red flags are measured on our internal Scorecard matrix.
1.2.3 Deeper details of the program
Details around the program calendar, network of mentors and partners, reporting and evaluation methodologies, and legal setup are kept private for confidentiality reasons and will be shared through our application process with the web3foundation.
1.3 Ecosystem Fit
The Polkadot Venture Studio is aimed to build and back protocols and ventures that use the Polkadot tech stack. This includes any of the following: Polkadot SDK, XCMP, Polkadot Core Time, Kusama Core Time.
Venture Studios generate venture returns, so the direct beneficiary will be venture studio investors. The other major target audience are entrepreneurs and builders from within Polkadot, but also from other ecosystems and non-web3 industries. The venture studio investors for the first cohort will be the web3foundation, and the goal will be to reinvest 80% of the proceedings into future cohorts. All subject to approval by the venture studio and its investors
The Polkadot Venture Studio will include perks for teams, most of which are already in place thanks to the work that Elixir Capital is already delivering. We plan to involve all other builders and tools in the ecosystem. In this regard, we plan to engage all Parachain, dApp developers, Wallet builders and tooling.
A lot of people in the ecosystem are voicing the fact that Polkadot has the best tech, but has no applications. The Polkadot Venture Studio will be in charge of filling the application gap and also attracting external non-technical talent to the ecosystem. That’s not to say we discard infrastructure plays or involving internal builders. Rather we believe that a Venture Studio model can excel in attracting builders with an ‘Application’ focus and in bringing in fresh minds from outside Polkadot.
Some examples of web3 ecosystems running Venture Studio models are the following:
- Filecoin
- Solana
1.4 Future Plans
The first cohort of the Polkadot Venture Studio will be run by a lean team as described above. As these ventures evolve and the program proves its worth, the program may expand into a full fledged venture builder with internal full time teams in engineering, marketing, product, research and business development.
Venture Studios deliver returns through the growth of companies, and also continue to raise capital to invest in more ventures. We plan to grow in both ways as the program evolves.
This strategy fits into the broader strategy of Elixir Capital. As a venture capital fund, we are both investors in early stage companies and protocols out of our venture fund, and we also run accelerator, builder, and fellowship programs that enable us to partner early with entrepreneurs and ecosystems.
2. Team
The initial team will involve core members from Elixir Capital and hires to run the program. Over the course of different cohorts, the Polkadot Startup Studio may grow its team.
2.1 Team members
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Scott Collen: Scott was previously a Partner at Outlier Ventures and Head of Accelerator Programs where he covered over 100+ investments in early-stage Web3 businesses over 21 cohorts. He set-up and managed relationships with leading top-tier ecosystems such as Filecoin, Polygon, Polkadot and Hedera and as a result of this, is well-versed in the ins and outs of what large protocols and ecosystems are looking for, how best to position the program to become the coveted destination choice for the best emerging founders and startups and how to position the startup cohorts offerings in a competitive world. He holds an MBA from Hult Business School in London.
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Smiyet Belrhiti: Smiyet holds an MBA from Columbia Business School and brings a wealth of traditional finance experience having spent 15 years in PE and VC investing. Prior to founding Elixir, Smiyet founded a Web3 Fund of Fund and previously, was Visa’s Head of Ventures and CorpDev for the CEMEA region. Smiyet brings invaluable experience to new founding teams on matters such as setting top-down strategy, financial analysis and projections, capital formation, implementation of the appropriate compliance and an all-round understanding of how incumbents in traditional markets operate and thus, on how to position startup challengers.
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Rachel Herauf: Previously Platform Manager for the accelerator programs at Outlier Ventures, Rachel has spent the last 3 years in web3 venture. From working hands-on with early-stage start-ups on research & strategy to building and optimizing the structure & resources of the program, she has a thorough understanding of what actually helps founders and projects. Rachel has a particular interest in projects that further drive sustainability & decentralization in Web3 – particularly infrastructure & DAOs.
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Robin Nordnes: Tech Lead at Elixir Capital, Robin is both operator and entrepreneur within Web3, guiding over 150 startups from ideation to mainnet launch. His blend of technical expertise and product-minded investment insight led to multi-million dollar successes during his time at Outlier Ventures as a tech analyst and solutions architect. Prior to Web3, Robin was a co-founder of an East Africa based fintech startup and was awarded for his entrepreneurship in Norway. Robin’s rigorous technical perspective sharpens his approach to early-stage crypto investments at Elixir Capital.
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Pasarn Intarangsi: Pasarn, formerly a venture investor and operator/ builder, has strong experience including both fintech VC and Corporate VC where he focused on identifying and conducting due-diligence on early-stage companies pre-investment and assisting their growth and scale post-investment. Before this, he worked in a Global Equity fund and corporate M&A advisory in Australia, later relocating to London. Pasarn is enthusiastic about Web3’s potential to empower startups to disrupt incumbent Web2 enterprises at various levels, from data and software infrastructure to fundamental business models.
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Albert Malagarriga: Albert has spent the last 10 years as a founder and builder in Insurance, mobility and healthcare. He has operated businesses in 3 different European markets and raised a cumulated €25M from top-tier venture capital. He’s launched ventures with different structures: solo entrepreneur, venture backed and venture studio built with Rocket Internet and Antai Ventures. He has been advising various startups in product and fundraising, and working with listed companies helping their engineering and product teams to navigate uncertainty. His focus is on the intersection of technology, consumer and regulation.
2.2 Contact
- Contact Name: Albert Malagarriga
- Contact Email: albert@elixircapitalxyz
- Website: elixircapitalxyz
2.3 Legal Structure
- Registered Address: 94 Solaris Avenue Camana Bay, PO Box 1348 Grand Cayman, KY1-1108 Cayman Islands
- Registered Legal Entity: Elixir Capital
2.4 Team’s experience
Elixir Capital is an early stage venture capital fund that invests in the best web3 teams across multiple ecosystems. We bring in the best of two worlds: traditional venture capital approach and setup, and the know-how and network of a web3-native team that has been investing in this space for years. Our team members have different backgrounds, ranging from Private Equity, Venture Capital, serial builders and entrepreneurs, and accelerator program managers. Our team comes with experience from blue-chip names such as Outlier Ventures, Visa Ventures, Rocket Internet, UBS among others.
As a fund, we also engage with ecosystems and regional hubs by running startup-schools, accelerator programs, fellowship programs and startup studios. We can therefore execute on an ecosystem development mindset.
2.5 Case Studies of Current and Previous Work
2.5.1 Confidential (currently running)
This program is currently running and still cannot be disclosed. Disclosure will happen in the coming weeks and will be part of our application.
Elixir’s full team is currently running the web3 accelerator for the government of XXX. The program is based in XXX where digital asset startups can operate in a progressive regulatory environment. The program includes:
- 3-month in-person accelerator program curated for web3 startup requirements
- Tailored support and mentorship
- Access to preferred partners, resources, and regulator
- Access to regional and international investors through demo day
2.5.2 Outlier Ventures
Our accelerator team (Scott, Rachel and Robin) has spun out from Outlier Ventures and founded the accelerator programs at Outlier for major ecosystems such as Polygon, Polkadot and Filecoin.
Outlier Ventures was founded in Europe in 2014 as a digital asset advisory firm and incubator. It gained widespread recognition in 2019 when Scott Collen joined the company to launch its pre-seed Web3 accelerator program. Rachel Herauf (Elixir’s Head of Founder Services) joined shortly after to manage and operationalise the accelerator programs and it is widely known now as a leading Web3 accelerator.
The first accelerator program was run in-person in Q4 2019. Subsequent programs were run virtually, initially due to the global COVID-19 pandemic and more recently to take advantage of a global talent pool. The team that delivered the first cohort consisted of seven people.
The 3-month program was specifically designed for Web3 startups and covered areas such as token engineering, legal & compliance, marketing, product & technology, talent, and others.
The program also provides mentorship to the startups from a network of external contributors with expertise in Web3 technologies and general business advice. The network has over 500 members, of which between 100 and 200 are actively involved with the portfolio in any given program cycle. Typically, any of our previous acceleration programs will provide an end-to-end service that includes startup recruitment, pipeline management, investment selection, investment execution, program and post-program management, and a series of select events to collaboratively promote the partners and relevant portfolio start-ups.
Throughout programs run by the Elixir team, they have invested in over 250 teams since 2019 and partnered with blockchain protocols such as Polygon, Polkadot, Hedera, and Filecoin, as well as corporations such as Walmart and fashion tech company Farfetch.
2.5.3 Founder Institute
The Founder Institute (FI) is a global business incubator and entrepreneur training program founded in Palo Alto, California in 2009. FI has chapters in over 180 cities and more than 65 nations, and offers a four-month part-time program for new and early-stage entrepreneurs. The program helps participants develop their business ideas and form companies, and requires graduates to create a fully operational company by the end of the program. As of 2018, over 3,500 companies had been created from the program, which raised over $800M in total funding.
FI’s program is unique in several ways. First, it recruits and accepts new and early-stage entrepreneurs who may still be full-time employed, and who don’t necessarily yet have a fully formed idea or company. Second, one of the key requirements for graduation is the incorporation of a company. This requirement ensures that participants have a strong foundation for their businesses and are committed to their success. Finally, only around 40% of enrolled students end up graduating the program. This high-stakes environment ensures that only the most motivated and capable entrepreneurs are successful.
FI has a proven track record of success. Its alumni have founded companies that have raised over $800M in funding, and many of these companies have gone on to achieve significant success. FI is a valuable resource for entrepreneurs who are looking to launch and grow their businesses.
The Founder Institute’s global reach is another key feature of its program. With chapters in over 180 cities and more than 65 nations, more entrepreneurs can gain access to the training and networking opportunities that FI offers. Each chapter has its own mentors, but the curriculum is similar across all locales. Mentors are selected based on their experience as successful founders or CEOs. As of 2014, there were 3,100 CEO mentors in The Founder Institute network.
Networking is another major component of the program, allowing entrepreneurs to connect with like minded individuals in their region. In 2017, Scott Collen led the London Chapter of Founder Institute with a team of two other people. Over the course of two years, they worked with over 40 emerging entrepreneurs and created a strong mentor network within London.
The London chapter had previously been dormant, so the on-the-ground team was tasked with the following:
- Recruiting high-profile mentors from the UK tech scene
- Launching and running a series of events to position Founder Institute as a prominent player in the London tech scene
- Developing relationships with professional services partners to sponsor and engage with elements of the cohort
- Pipeline maintenance and conducting selection interviews focused on the competencies of the individual
- Building a network of angel investors to help startups achieve funding milestones 11
Since stepping down as Director, Scott Collen has passed the network and local relationships on to the next team. The London chapter has continued to flourish and has been run every year since 2017 on the foundations set up by Scott Collen and his team.
2.5.4 Rocket Internet
Rocket Internet was founded in Berlin in 2007 and grew to be the most well known venture builder in Europe and amongst the largest in the world with the following strategy: Becoming the largest internet holding outside the USA and China. In 2014 it went public in the Frankfurt stock exchange after having already build category defining companies in Europe, Africa, Latam, Middle East and South East Asia such as Zalando or CityDeal. It would later grow even more and build DeliveryHero, Lazada, Linio, Westwing and Jumia.
In 2015 it had grown to employ over 300 people in the venture builder and 300.000 people in its ventures and over $2bn in revenue. Rocket Internet has backed over 200 companies, of which listed companies have a current valuation of over $30bn.
By the time Rocket Internet was launching 10 ventures at a time, testing its initial concepts in high density and high internet penetration markets such as London or the Philippines as validation methodologies for its companies. Ventures would be launched in 2 months from scratch, backed by internal teams and then grown by founders who joined later on. Companies would launch multiple markets at a time to test and validate where to grow faster and how to win, de-risking many of the assumptions to help ventures reach series A funding.
Albert Malagarriga was part of Rocket Internet based out of Berlin from 2015 to 2017, launching Ridelink, a carsharing marketplace and insurance distributor, and building alternative digital products for Foodora / Delivery Hero.
2.5.5 Zx Ventures
Zx Ventures is an investment and innovation business of AB InBev, a NYSE listed company with over $100bn market capitalization. Zx Ventures activities include investing (seed to series C), partnering with devoted founders and best-in-class business builders, and operating its internal incubator to take projects from ideation to reality. The business invest ahead of the curve by seeding, launching, and scaling new products.
ZX was instrumental in driving the company’s topline growth, spearheading innovation and provided the framework and the vision of the company’s next-generation strategy. Its activities and products were consistently discussed in detail in the company’s annual reports and regularly talked about during investor presentations. Its impact also spanned across both the supply and operations side of the business through to commercial and consumer engagement.
Pasarn was leading finance and strategy for Zx Europe and Africa fund as well as global e-commerce strategies during his time at the company. The role involved evaluating new investments into startups and internal incubators as well as working on key strategic projects with founders of portfolio companies to help them grow and scale.