Governance & Entity Structure
This is an excerpt from "The GP Dilemma: Escaping the Venture Studio Trap"
To download the full report, click here.
One of the most common—and most consequential—struggles studio GPs face is how to set up their governance and legal architecture. Early decisions about entity structure, fund vehicles, and IP ownership often get made hastily, driven by short-term expedience ("just incorporate so we can sign a contract") rather than long-term design. The result is a creeping sense of unease.
"I'm over my skis."
GPs worry they may have already locked themselves into a structure that could sabotage future fundraising or exits.
- Fear that an early entity/structural choice will later spook investors
- Fear that IP will be stuck in the wrong entity or split awkwardly between partners
- Fear of "gotcha" moments during diligence when potential lead investors uncover red flags
And because governance bleeds into financial controls, reporting, and investor communications, structural missteps don't just create headaches—they undermine the studio's credibility with the very stakeholders whose trust they most need.
01
Fundraising Friction
Institutional LPs expect clean, auditable structures. If fund docs are messy or the studio/fund relationship is opaque, deals stall or disappear
02
Investor Relations Breakdown
Without disciplined reporting and governance processes, the studio can't produce credible dashboards or financial metrics
03
Exit Blockage
Misplaced IP or convoluted ownership makes portfolio exits unfinanceable. Strategic acquirers simply walk away
Blueprint & Entity Clarity
At 9point8, we operate on the fundamental principle that studios achieve their full potential when governance is meticulously designed from Day 1. We champion a concept called Blueprint & Entity Clarity—a robust, structured approach to legal, financial, and reporting architecture. This method is specifically engineered to seamlessly align capital, intellectual property (IP), and critical investor expectations, transforming potential structural vulnerabilities into sources of strength.
Our intervention focuses on three pivotal pillars that guide studios toward enduring success:
1
Entity Design
We establish clear divisions between the studio operating company, the portfolio holding company, and investment funds. This involves visually mapping IP flows, capital commitments, and incentive mechanisms.
We also develop "What if?" playbooks to stress-test the structure against various scenarios, including down-rounds, follow-on fundraises, or liquidity events, ensuring resilience and adaptability.
2
Governance Discipline
Implementing standardized board structures and clearly defined voting rights (e.g. who is in charge of investment capital vs. what the studio ideates and validates)..
We embed metrics and planning cycles directly into the studio's operations, allowing GPs to demonstrate consistent discipline to Limited Partners (LPs).
3
Investor-Ready Transparency
We prepare audit-ready data rooms, complete with entity documents, operating agreements, and financial records.
Metrics dashboards are developed to clearly link portfolio performance to overall fund economics.
We establish a transparent chain of custody for intellectual property, providing reassurance to both potential acquirers and LPs during critical transactions.
To achieve this clarity and discipline, 9point8 brings a suite of specialized tools and practices:
Entity Design
We provide custom templates for dual-entity, holdco, and fund-first structures, precisely tailored to the studio’s strategic objectives and geographical footprint.
Governance Checklists
Our step-by-step rubrics cover everything from bylaws and board formation to reporting obligations and IP assignment, ensuring no detail is overlooked.
"Command Center" Dashboards
We implement integrated systems that unify metrics, planning cadences, and investor communications into a repeatable, efficient workflow.
Due Diligence Mock Runs
Simulated diligence processes are conducted to proactively identify and address risks, long before real LPs or acquirers enter the picture.
Studios that embrace Blueprint & Entity Clarity emerge with:
Investor Confidence
Fundraising discussions flow smoothly, free from persistent governance questions that can derail negotiations.
Operational Clarity
GPs gain a precise understanding of where intellectual property, capital, and incentives reside across all entities.
Exit Readiness
Portfolio companies are better positioned to secure follow-on capital or pursue acquisitions, unburdened by structural impediments.
Most significantly, GPs themselves shed the constant anxiety of "being over their skis." Instead, they gain unwavering confidence in their governance narrative—a clarity that resonates profoundly throughout fundraising efforts, investor relations, and the studio’s long-term trajectory.