diff --git a/scripts/microvm-runner-launch b/scripts/microvm-runner-launch
index 1d71061..7f02cb9 100755
--- a/scripts/microvm-runner-launch
+++ b/scripts/microvm-runner-launch
@@ -38,7 +38,7 @@ trap cleanup EXIT INT TERM
 
 test -r "$base_image"
 test -r "$firmware"
-mkdir -m 0700 -p "$vm_dir"
+install -d -m 0700 "$state_root/instances" "$vm_dir"
 qemu-img create -q -f qcow2 -F qcow2 -b "$base_image" "$overlay"
 
 cat >"$vm_dir/meta-data" <<EOF