Fenwick’s Byron Dailey sat down with Gitwit co-founder Jacob Johnson to discuss venture studios and the “Tulsa Model” developed in collaboration with Tulsa-based Gitwit.
The Tulsa Model is an evolved venture studio structure designed to optimize both operational efficiency and fundraising appeal, offering lessons for venture studios aiming to build and scale startups.
At its core, the Tulsa Model blends the strengths of Byron Dailey’s “Model A” venture studio structure with localized investor preferences. It corrects common venture studio pitfalls (such as misaligned cap tables and poor incentive alignment) by separating the studio’s two roles: co-founder and investor. Startups in the portfolio have two distinct equity line items: one for the studio’s common founder shares and another for its early-stage investment stake. This dual representation clarifies the origin of equity, tells a more compelling story to downstream venture capital, and avoids the “dead capital” problem that deters Series A investors.
For studio employees, the model’s use of a Founder Equity Holding Company (or HoldCo) with profits interests ensures they share in portfolio-wide upside, aligning incentives across the team while preserving tax advantages like Qualified Small Business Stock (QSBS) treatment. This enables potential tax-free gains at exit, a powerful recruitment and retention tool.
On the investor side, the Tulsa Model borrows from private equity and real estate conventions by offering a preferred return of capital before the studio team shares in profits. This feature resonates with investors accustomed to capital-return waterfalls, making the structure more marketable beyond traditional VC circles.
Additionally, the model’s operational vehicle remains a separate, wholly owned entity, protecting the studio’s long-term value from dilution. This separation supports sustainable scaling by keeping the “engine” that produces ventures intact. Learn more about venture studio formation and capitalization considerations.
By combining incentive alignment, tax efficiency, cap table clarity, and investor-friendly return structures, the Tulsa Model positions venture studios to raise capital more effectively and spin out startups that can compete for downstream funding without expensive restructuring. For founders, it’s a reminder that structural design is as critical as operational excellence in creating scalable startup portfolios.
Learn more in this discussion about venture studios with Fenwick’s Byron Dailey, Mark Stevens, and Jonathan Sagot.