📶 family offices in VC

Login 🔑 | Join 👥 | Upgrade 📈 | Sponsor 📣 | Earn $

Good morning 👋

This week we have a guest post from @MrFamilyOffice about family offices and how some of them are shaking up venture capital scene.

This post covers the tip of the iceberg. If you’re looking to learn more about the family office world, give him a follow on Twitter or subscribe to his weekly newsletter to start getting more content like this directly in your inbox every Friday.

Without further ado …

Here’s what VCs, startup founders, and other LPs should know about family offices.

Should VC be worried about family offices? 🤷‍♂️

There’s a buzz around family offices. 

EY’s claim that “private family capital is larger than private equity and venture capital combined” underscores the sheer economic might wielded by family offices. According to PWC, in 2022, 32.5% of all capital invested in startups originated from family offices.  

So in the fiercely competitive space where allocators vie for the best deals, should VC firms be concerned about family offices?  

The conventional view of family offices is rooted in the era of legacy stewards like the Rockefellers and the Grosvenors. Traditionally focused on wealth preservation, these family offices have historically allocated only modest sums to venture capital. 

But the times, they are a-changin 

There are thought to be more than 10,000 single family offices in the world, most of which have been established in the last twenty years.  

On top of that, existing family offices are changing: they are opening up and becoming less siloed. They're forging strategic alliances with other wealthy families, engaging in co-investments, and actively sharing resources and best practices. 

And on top of that, the goals are shifting. Research by Knight Frank suggests that capital appreciation has overtaken wealth preservation as the primary goal of wealthy families.  

The new breed of family offices are challenging traditional stereotypes and startups are increasingly favoring family offices over venture capital as preferred partners.