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.
The Milestone Equity-Buyback, adapted.
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.
Validate → Build → Grow → Graduate → Recover.
Five phases — and a loop back, because not every venture goes up and to the right.
Find the problem
Consulting validates demand as a project — no equity taken, no studio cash drained.
Co-create the MVP
We take a founder-aligned stake, build at an at-cost retainer, and track the rest as deferred fees.
Scale with advantage
Operators, first customers, brand, and the corridor network get it to traction.
Capital funds it
Capital leads the round and clears the deferred fees — clean cap table, recycled cash.
Errored Coin closes the loop
For the ones that hit trouble: recover value, extract the lesson, feed it back to Validate.
Keeping consulting clients and ventures clean.
A studio inside a consulting firm creates one real risk — a venture that competes with, or is informed by, a client. These are the terms that prevent it. The full policy is internal; the principles are public.
Client-confidential data never flows into a studio venture. Separate teams and data rooms — a real wall, not a nominal one.
Every venture idea is traceable to a non-client source, our own thesis, or a consented origin — documented before any build begins.
If a venture could touch a client's core market, we disclose and seek consent — or we decline. The client comes first.
Studio ventures don't directly compete with an active client's core business without explicit consent.
A standing review signs off every spin-out for conflicts before it's built — a documented gate, not a judgment call.
Pricing between the arms is documented and arm's-length; Capital invests on its own thesis, never to bail out a studio obligation.
Because the arms share one entity, we tell clients and ventures plainly that Consulting, Capital, and Cofoundry are related.
The things people ask first.
What is the 'Milestone Equity-Buyback'?
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.
Why keep it all in one entity?
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.
How do you prevent conflicts of interest?
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.
Where does Errored Coin fit?
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.
Want to understand the model in depth?
We're happy to walk through how a build, a graduation, and the governance actually work in practice.
Talk to us →