Inside internships: Eric Schneider, Harvard and 25madison

Venture studios are not just paving the way for new ventures, they’re also paving the way for new careers. Many MBA students find themselves interested in both investment as well as operating a business and working in a venture studio can be a perfect fit. As students think about their summer internships, we’re sharing the stories of several MBA candidates who have worked in the space.

Today, we speak to Eric Schneider, a Harvard Business School candidate and engineer turned entrepreneur and investor who enjoyed his summer internship at 25madison so much that he decided to stay on during the Fall term.

How did you come to be working in a venture studio?

Ultimately what attracted me to the venture studio model is the mix of operating & building early companies as well as investing in them. My interest for both sides of the ecosystem developed simultaneously before entering HBS.

On the operating front, I founded and grew GMAT Mentors, a non-profit committed to supporting those unable to access traditional GMAT study resources due to financial or situational limitations, and those from communities underrepresented in business. My interest in investing started in consulting where I found myself constantly thinking more about new technologies & companies, which ones I think would win, and which ones I would invest in. I continued getting experience in investing during my first year at business school, confirming my dual-sided interest.

As I explored MBA internship options that were solely operating or investing, I felt I wouldn’t get the full exposure to the entrepreneurial ecosystem that I wanted. When I came across 25madison, their approach and team were a perfect fit.

What does a day in the life look like?

Two days at 25madison are never the same! Every day brings some variety and a mix of working on new incubation ideas, working with portfolio companies, meeting with amazing entrepreneurs and looking at new investment opportunities.

Here is one day broken down:

• (9–10am) Catch-up call for a new incubation idea we are testing. We have been running a MVP test with beta customers and catch up as a team at least twice a week to quickly iterate and evaluate the idea’s status. This quick iteration and testing is a key part of 25madison’s approach and helped me to better evaluate a new idea through its life cycle.
• (10–10:30) Internal 25madison team meeting to discuss what each person is working on and if they have anything to discuss with the whole team. I look forward to these meetings, especially in a virtual work environment.
• (10:30–12:30) Break in my schedule to catch up on email, miscellaneous items, and eat lunch!
• (12:30–2:30) Chat with a few entrepreneurs about their startups. Learning about what founders are passionate about and working on is exciting, making pitches an enjoyable part of the day!
• (2:30–5) Working on Limelight, one of our incubated companies which is in build mode and past the ideation stage. Limelight is a two-sided managed marketplace for America’s 30 million opportunity jobs, starting with 9.8 million skilled, blue collar opportunity jobs. I have been supporting sales and marketing efforts, including our sales forecast / reporting, LinkedIn ads, and email outreach.
• (5–5:30) Call with an investor at a separate VC firm. It is always great to catch up with other investors, exchange thoughts on what we are each looking at, and share our internal incubations.

What is the 25 Madison approach? How do the venture stages work?

For some background, 25madison is a relatively new venture studio founded in 2018 by founders who have built and run some of the largest companies in the U.S. To have this group of founders with their experiences is truly differentiating, and as a small team it has been great to work directly with them:

• Steven Price: Founder & Exec Chair, Townsquare Media // Senior MD, Centerbridge Partners // Founder and CEO, LiveWire Ventures and PriCellular Corp.
• Matthew Fremont-Smith: 30 years with Goldman Sachs, previously COO GS Bank USA, COO Asia Pacific, and Head of Worldwide Strategy Group
• John Daly: Chairman of Global Equity Capital Markets and Co-Head of Industrial & Natural Resources Financing Group, Goldman Sachs
• Gary Ginsburg: SVP & Global Head of Communications, Softbank // EVP, Time Warner // EVP, News Corp // Founding Editor & Counsel, George Magazine
• Michael Lynton: Chair of the Board, Snap Inc. // CEO Sony Entertainment, AOL Europe, and Pengiun Group
• Kirk Posmantur: Founder and CEO, Axcess Worldwide // Early investor & Co-Founder, Fiji Water, Tequila Avion, Captivate, Ring, Flexport
• Lance West: Chairman & CEO, Centerbridge Partners Europe // Partner, Goldman Sachs // Founder & CEO, GRP Financial

25madison incubates & builds businesses as well as invests in early stage companies. Incubations can be entirely ideated by 25madison, or brought in and co-founded with an entrepreneur.

Our studio team has been assembled across disciplines to support all business needs, including folks in strategy, branding, marketing, engineering, business development back office, and capital raising.

Our model is unique in that 25madison is an operating company and not a fund. Not having a traditional fee and carry structure with Limited Partners (LPs) provides us more flexibility in building a franchise that can operate across cohorts of ideas and companies. For entrepreneurs, that provides additional options for how we can work together.

25madison takes a thematic approach grounded in positive impact. We focus on software and tech-enabled businesses in plant-based living, path to work, sustainable cities, resiliency & preparedness, and the loneliness epidemic.

When ideating within these themes, we take a focused, rapid, and iterative approach. Our process includes six main phases:

1. Assess — Exploring the problem theme or idea
2. Ideate — Develop ideas informed by research, tested and refined
3. Validate — Test ideas and initial business plans with audiences
4. Design — Design product and brand, build initial operating team
5. Build — Launch fully operational business through internal capital
6. Scale — Grow and expand, utilizing outside capital as needed

What has been the biggest learning?

I feel my time at 25madison was full of learnings, but one big one is being comfortable wearing different hats in constant rotation each day. I enjoy the challenge and feel it has increased my understanding and empathy for all stakeholders in this industry.

Having consistent hands-on experience with both operating and investing creates a virtuous cycle of understanding and learning. When talking with entrepreneurs I get the day to day challenges they are experiencing, and at the same time understand how an investor thinks about investments in our incubated companies.

What are you enjoying the most?

The people I get to interact with on a daily basis are amazing and inspiring. This includes the team at 25madison, other investors, other entrepreneurs and business builders, and our portfolio company teams.

The 25madison team in a virtual birthday celebration

25madison is a small team so I have really enjoyed being able to work with everyone in some capacity.

Other investors I’ve been able to meet have unique insights and approaches to investing.

Founders have incredible passion and excitement about their startups, discussions I always leave energized and inspired.

Our portfolio companies and incubations have incredible teams and I have gotten the privilege to work with a few of them, including Ben Pfiefer (CEO of Limelight) and Dan Kessler (CEO of harbor)

What do you think about the effectiveness of the ventures studio model and where do you think it’s going next?

I think the venture studio model is fairly effective at quick iteration, leveraging past learnings, and fast acceleration when an idea is worth pursuing.

25madison has a team full of prior operators and entrepreneurs, affording us insight into business building from a variety of perspectives. Additionally, we are not married to any idea from the onset, leaving us open to quick pivots or abandoning ideas all together if they are not proving worthwhile. I think this is a distinct advantage over an individual entrepreneur developing an idea on their own, where a complete uphaul of an idea is much harder.

As an example, we were recently working on three ideas within the future of work space. After some initial customer surveys, research, and discussions with companies, one idea we decided to completely abandon, another we decided to pivot given new insights, and the last we are pushing forward with an MVP test.

In terms of the studio landscape broadly, the Global Startup Studio Network did a studio in 2020, “Disrupting the Venture Landscape”, which analyzed 258 startups created by studios. The data showcases the speed and effectiveness of the studio model in identifying and pursuing early stage ideas. I think we will continue to see more venture studios and more successful startups out of venture studios in the future, continuing the trend in this data.

Credit: GSSN

One potential drawback that venture studios have to balance is the equity distribution over time, particularly for the CEO and executive team. Given the studio puts in a lot of capital and effort developing an idea before and alongside a CEO, they would get more equity than a typical passive investor. This can potentially create a more rapid decline in equity for the executive team as the company goes through later fundraising rounds. I think studios should be comfortable with options that rebalance equity in future rounds to ensure the CEO and executive team are always appropriately incentivized to continue growth. Maintaining this balance is important for how the venture studio model develops.

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