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  • March 2021
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Founders Factory

By: Jeffrey F. Rayport and James Barnett
  • Format:Print
  • | Language:English
  • | Pages:26
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Abstract

In January 2020, Founders Factory (FF) Executive Chairman Brent Hoberman and CEO Henry Lane Fox were considering FF’s expansion strategy. FF operated as a venture capital (VC) fund built around an accelerator and incubator, and organized around sectors within technology innovation—media, education, beauty, travel, finance, home & hygiene, AI & big data, and retail. FF sought a quasi-exclusive corporate partner to fund investments in each sector. By 2020, FF had 11 partners across 9 sectors; it had raised more than £280 million and launched nearly 100 startups. FF had three offices in addition to its London headquarters—in Johannesburg, Paris, and New York City. Each was set up as an independent operating company with roughly the same ownership structure. Deploying a “franchising” model limited FF London’s financial risk; it also enabled each satellite office to leverage FF's reputation and resources while operating with a fair degree of autonomy. Hoberman and Lane Fox were considering other approaches to adding their next international office. With those thoughts in mind, the pair were meeting with their leadership team to address a series of questions related to organizational design: should they maintain their current ownership and operating structure, and continue to establish each new office as its own operating company? Or should they pursue an expansion strategy with a centralized approach and scale by adopting a more traditional corporate structure?

Keywords

Entrepreneurship; Markets; Planning; Expansion; Global Range; Business Model; Talent and Talent Management; Experience and Expertise; Corporate Entrepreneurship; Global Strategy; Innovation Strategy; Growth and Development Strategy; Management Teams; Organizational Change and Adaptation; Partners and Partnerships; Internet and the Web; Mobile and Wireless Technology; Technology Industry; Africa; South Africa; Johannesburg; Europe; France; Paris; United Kingdom; England; London; United States; New York (city, NY)

Citation

Rayport, Jeffrey F., and James Barnett. "Founders Factory." Harvard Business School Case 821-009, March 2021.
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About The Author

Jeffrey F. Rayport

Entrepreneurial Management
→More Publications

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  • The Overlooked Key to a Successful Scale-Up By: Jeffrey F. Rayport, Davide Sola and Martin Kupp
  • Why Some Start-Ups Fail to Scale By: Jeffrey Rayport and Curt Nickisch
  • Cost Plus Drugs By: Alexander MacKay and James Barnett
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