The Role of Family Offices in the Venture Ecosystem

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  • When investing in established venture funds, family offices ranked deal flow and sourcing as the chief pain points, while for emerging managers, a manager’s track record and credibility are the critical areas of focus.
  • Co-investing alongside a fund manager is a widespread investing strategy, yet only a minority of family offices surveyed had the in-house resources to review and monitor these investments.

The vast majority of family offices allocate capital to venture funds — including riskier first-time funds.

Family offices are well suited to invest in startup companies given their entrepreneurial culture and heritage as well as their focus on husbanding family wealth across generations. Thus, it isn’t surprising that nearly 90% of the family offices surveyed allocate capital to VC funds.

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Family offices are exposed to distinct pain points when investing in established vs. emerging venture funds.

When investing in established venture funds, the surveyed family offices ranked deal flow and sourcing as the chief pain points. An established VC’s track record and size of fund ranked as secondary concerns.

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Co-investment continues to be an important strategy for putting more capital to work, but few family offices have in-house expertise.

As they’ve gained experience investing in venture funds, family offices have shifted to investing alongside a fund manager. According to our survey, 82% of the surveyed family offices co-invest.

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