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COFOUNDRY - HOW WE BUILD
HOW WE BUILD — AND KEEP IT CLEAN.
The hybrid model behind Cofoundry, and the governance that keeps a studio inside a consulting-and-capital firm honest. The complete cycle, and the firewall around it.
The best idea we studied, adapted to a single entity — and the discipline that makes it trustworthy.
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WHAT IT IS
Two classic studio models each have a flaw. Pure fee-for-service treats the startup as a client and starves the upside. Pure equity-share starves the studio of cash. Our hybrid — adapted from the Milestone Equity-Buyback model — bridges them, and fits Aadi unusually well because we have both a cash-rich consulting arm and an equity-driven capital arm under one roof.
Here's how it works. In validation, Consulting funds the discovery, so no equity is taken from a company that doesn't exist yet and no studio cash is drained. In build, the studio takes a meaningful, founder-aligned stake and charges only an at-cost retainer — just enough to cover the operators on it — while tracking the rest of its work as deferred fees rather than a cap-table-clogging invoice. At graduation, Capital leads the round and part of it clears the deferred fees: the studio's cash recycles to the next build, Capital holds clean equity, and the venture's early cap table stays uncrowded.
Crucially, this all happens inside one entity. Equity is held through the Investing arm; there's no separate fund, no SPV stack, no AUM — until a genuine spin-out trigger (external investment, regulation, or scale) makes that structure necessary. It's the studio model, fitted to how Aadi actually works.
THE COMPLETE CYCLE
Five phases — and a loop back, because not every venture goes up and to the right.
Consulting validates demand as a project — no equity taken, no studio cash drained.
Consulting-funded
We take a founder-aligned stake, build at an at-cost retainer, and track the rest as deferred fees.
Studio + operators
Operators, first customers, brand, and the corridor network get it to traction.
Studio + network
Capital leads the round and clears the deferred fees — clean cap table, recycled cash.
Capital-funded
For the ones that hit trouble: recover value, extract the lesson, feed it back to Validate.
Errored Coin
Most studios only tell the up-and-to-the-right story. Ours is honest about the whole lifecycle — and Errored Coin is what makes it complete: the downside, handled with the same rigour as the upside.
GOVERNANCE
Information firewall
Client-confidential data never flows into a studio venture. Separate teams and data rooms — a real wall, not a nominal one.
Idea provenance
Every venture idea is traceable to a non-client source, our own thesis, or a consented origin — documented before any build begins.
Disclosure & consent
If a venture could touch a client's core market, we disclose and seek consent — or we decline. The client comes first.
Non-compete carve-out
Studio ventures don't directly compete with an active client's core business without explicit consent.
Conflicts review
A standing review signs off every spin-out for conflicts before it's built — a documented gate, not a judgment call.
Arm's-length terms
Pricing between the arms is documented and arm's-length; Capital invests on its own thesis, never to bail out a studio obligation.
Single-entity disclosure
Because the arms share one entity, we tell clients and ventures plainly that Consulting, Capital, and Cofoundry are related.
Pairs with —
■ Build · Co-create ■ Grow · Scale ■ Capital · Graduation funding ■ Cofoundry · Errored Coin
QUESTIONS, ANSWERED
A hybrid where Consulting funds validation, the studio builds at-cost with deferred fees, and Capital clears those fees when it funds the round at graduation — so cash recycles and the cap table stays clean.
Because it matches our positioning and keeps things simple. Equity sits in the Investing arm; we only move to separate entities, SPVs, or a fund when a real trigger requires it.
Seven governance terms — information firewall, idea provenance, disclosure-and-consent, non-compete carve-outs, a conflicts review, arm's-length pricing, and single-entity disclosure. The client always comes first.
It closes the cycle. When a venture or asset hits trouble, Errored Coin's distressed intelligence recovers value and feeds the lesson back to validation — so the studio gets smarter, win or lose.
We're happy to walk through how a build, a graduation, and the governance actually work in practice.
Talk to us →