How K8 is Defining the Venture Builder Studio Model

A few weeks ago, while traveling in Oregon, I came across a bladesmith (the professional title for a knife craftsmen) who pushed me to reevaluate how I think about business.

A true master of his trade, this bladesmith (Dave) turns a product of utility into a thing of beauty. From the wood carvings, stone in-lays and etching, he forges knives, so basic in concept, and creates art. His incredible alchemy of art and science got me thinking about the role that tangible work plays in our increasingly digital world. And hey, it inspired me to purchase two gorgeous chef knives and a stunning, but entirely unnecessary sword (tomatoes, carrots, and other dice-able veggies, BEWARE!!) that needed to be shipped back to Chicago – I suspected that TSA would frown on having a gladius in the overhead luggage space... but those are conversations for another time.

What Dave, really got me thinking on was the power of action-based creation. He viscerally creates his knives. He sees ways to design them uniquely, and he executes on his vision with metal, heat, muscle, and will. I’m sure his process is informed by trial and error and constant skill development, but it is one of active progress. This constant evolution is a trait critical to a business’ success as well, and it’s one that K8 has been implementing since we set out to do something groundbreaking in venture capital.

Let me explain.

In the traditional world of venture capital, firms make large, long-term investment ‘slices’ in start-ups that they find promising at about twenty percent equity per round. What’s the expected dilution on subsequent rounds for that company? (Answer: high)

K8, on the other hand, builds start-ups from scratch. We found and sell companies, focusing on a three to five year turnaround with $15MM-$30MM target exits. We employ a lean, fast process that allows for K8 to have more control over the “forging” of the company, through each of its developmental stages. In short, through this commercialization process inherent in our Venture Builder Studio concept, we are defining a new asset class, and providing access to an alpha that, heretofore, hasn’t been available. So, it only makes sense that the businesses we found bring about the same level of disruption in their respective industries.

There are two main criteria for K8 to consider building and investing in a company. First, the business must have a data component to it. At K8, we know that data applications, their integration with budding technologies, and company success, are inextricably connected. We commercialize companies with a concept in mind: that utilizing data in unique, strategic ways allows for scalable and sustainable growth. Second, and what is probably obvious at this point, is that the business must be disruptive. It doesn’t matter what field — travel, finance, B2B marketing, CPG — K8 commercializes companies that address tangible holes in their respective markets.

To boil it down, K8’s ethos, the reason we function differently from the traditional VC’s, is not because we got bored with the status quo and decided to do something radical. K8 was created because we saw an opportunity for improvement in the VC world that would have a ripple effect, through the companies we could build, on countless other business sectors. We identified ways in which our market could be more efficient and more strategic. We saw the chance to build companies we truly believed in, and in doing so, the chance to build a world that we were more excited about. And we wanted to work with people who see their corner of the world the same way as we see ours: constantly ripe for innovation.

Just like Dave the bladesmith, we are doing this through our everyday actions. Just as he blends beauty and functionality in more interesting ways with each product, we are reconceiving what VC looks like with every transformative company that we build.

Oh, and do we plug brilliance and creativity? You bet. Take a look at our inspiration’s work here.

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