Founders Factory

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?