Ownership vs. Access: Two Early-Stage Venture Capital Investment Models

Over the past decade, the European venture capital (VC) ecosystem has matured significantly.

A surge of emerging managers and the launch of new funds have reshaped the investment landscape, particularly in early-stage technology investing.

While there is no secret formula for guaranteed success, two distinct and viable investment models have emerged from the perspective of Limited Partners (LPs):

1. The Ownership Model – Typically deployed by Micro VCs with fund sizes of €40–90M, this model focuses on leading pre-seed and seed rounds while securing a minimum target ownership of 10% in portfolio companies.
2. The Access Model – Often pursued by smaller Nano Funds or Angel Funds with fund sizes between €10–30M, prioritizing early access to the best deals over ownership stakes.

Both models offer a compelling pathway to strong returns, but each comes with its own set of challenges and strategic imperatives.

The Ownership Model: Betting on “Dragons”

Fund Strategy & Portfolio Construction

Funds operating under the Ownership model typically build concentrated portfolios of 20–30 core companies, aiming to secure significant equity stakes. Their strategy hinges on identifying and backing one or two outlier companies (“dragons”)—startups capable of generating fund-returning exits under the power law distribution of venture capital.

To sustain their ownership levels, these funds reserve capital for follow-on investments in Series A and potentially Series B rounds. Leading rounds is a defining characteristic that necessitates firm conviction and the ability to win competitive deals. This approach often requires differentiation through:

• Sector expertise (e.g., AI-focused Air Street Capital , cybersecurity-driven Adara Ventures , or Hardware specialist HCVC ).
• Geographic focus, although this edge is diminishing as the market globalizes.(e.g. Founderful )
• Technical or operational value-add, positioning the fund as an ideal lead investor.

Challenges & Considerations

1. Deal Competition & Valuations – To secure a 10%+ ownership stake, funds must compete against other lead investors, sometimes driving up valuations or risking exclusion from top deals.
2. Follow-On Investment Risks – Many follow-on decisions occur when a startup’s risk profile remains high. If a fund chooses not to participate, it may send a negative signal to other investors.
3. Liquidity Constraints – Large ownership stakes limit secondary exit opportunities. Liquidity events typically occur at the final exit, extending the time to return capital to LPs.

Success Factors

To succeed in the Ownership model, fund managers must excel at:

• Sourcing and winning high-quality deals
• Providing meaningful support to portfolio companies
• Making bold, high-conviction investment decisions
• Navigating follow-on strategies effectively

Despite its challenges, this model has demonstrated strong multiple potential, as even one or two successful outliers can generate substantial fund returns.

The Access Model: Broad Exposure, Early Liquidity

Fund Strategy & Portfolio Construction

Unlike the Ownership model, the Access model prioritizes early entry into top-tier deals rather than securing a minimum ownership threshold. These funds typically build larger portfolios of 40–60 companies and allocate nearly all their capital in the first check, with little or no reserves for follow-ons.

This strategy is well-suited for:

• Solo GPs or small teams managing lean operations.
• Angel Funds and Nano Funds with fund sizes between €10–30M.
• Co-investing alongside Micro VCs rather than leading rounds.

By participating in a collaborative investment approach, these funds often complete seed rounds alongside other Micro VCs or invest in pre-seed rounds alongside 4–5 similar-sized funds, leveraging complementary strengths.

Advantages & Liquidity Strategy

1. More Outliers, Less Risk Per Bet—These funds increase the likelihood of backing multiple high-performers by spreading investments across more companies.
2. Early Liquidity Opportunities – Since their stake in a company is relatively small, Angel Funds face fewer restrictions when selling in the secondary market. If a company reaches Series B successfully, investors often find opportunities to exit partially or fully, typically around years 4–5, allowing for de-risking of the portfolio.
3. Stronger IRR Performance – While the absolute multiple may be slightly lower than Ownership-driven funds, earlier distributions (DPIs) compensate LPs through a strong IRR profile.

Challenges & Considerations

1. Limited Control & Influence – With smaller stakes and no board seats, Access funds rely more on network strength and deal sourcing, rather than direct influence on company strategy.
2. No Follow-On Capital – Without reserves for follow-ons, Access funds must rely on the next wave of institutional investors to support their portfolio companies.
3. Dependence on Syndication – Success hinges on the ability to consistently access top-tier deals and collaborate effectively with leading Micro VCs and other investors.

Success Factors

To excel in this model, fund managers must:

• Leverage a strong network to access top-tier deals early.
• Be highly selective in their initial investments.
• Facilitate co-investments and round completion rather than leading rounds.
• Ensure secondary liquidity windows to enhance fund returns.

Case Study: Masia’s Angel Fund Approach

At Masia , we have chosen to adopt the Access model, focusing on co-investing in the best deals in Barcelona’s tech ecosystem. Our strategy revolves around:

• Scouting high-potential, globally minded local entrepreneurs.
• Connecting startups with leading Angel Funds and Micro VCs.
• Supporting founders relocating to Barcelona by integrating them into the ecosystem.

With a target of 60 companies in our portfolio and a collaborative investment philosophy, we aim to play a critical role in shaping the next generation of South European tech giants.

Conclusion

Both Ownership and Access models offer compelling approaches to early-stage venture investing. The right choice depends on a fund’s structure, investment philosophy, and operational strengths.

• Ownership funds must be highly skilled in winning deals, maintaining conviction, and supporting companies over a long time horizon to capitalize on outlier exits.
• Access funds thrive on broad exposure, syndication, and early liquidity management, balancing a higher number of successful bets with strategic secondary exits.

Ultimately, both models have demonstrated their ability to generate strong returns, and LPs evaluating venture capital strategies should consider which approach aligns best with their risk tolerance, return expectations, and time horizon.

Additional Resources

The fallacies in concentrated fund models: an Unruly fund construction thesis (by Stefano Bernardi Bernardi, GP at Unruly)

The Performance Paradox in Venture Capital (by Dan G. , Head of Insights at Equidam)

Picking Winners is a Myth (by Clint Korver er, co-founder of Ulu Ventures)