Usually it is arranged like a normal VC fund at the LP level, but deployed with extra venture-studio permissions.

- LPs commit capital to the fund
- The GP makes capital calls as needed
- Called capital can only be used for what the LPA allows

For a studio, the LPA should explicitly allow:
- investments into studio-created companies
- pre-formation or incubation spend
- studio affiliate compensation / conflicts

Practically, early company costs are often funded before a priced round via:
- SAFEs
- convertible notes
- founder stock issued cheaply at formation, with the fund buying in early

That avoids needing a full valuation immediately. Software, salaries, and permits are then paid by the startup entity from that financing.

References:
- https://decilehub.com/base/1-general_questions/165760-what
- https://govclab.com/2023/04/25/how-to-build-a-venture-studio/