Family offices invest large amounts of capital in startups every year. According to a recent report from PwC, 27% of all startup deals in the first half of 2023 were from deals involving family office investors.
Despite their prevalence in startup transactions, family offices are less publicized and less easy to find than VCs, making them a potentially tricky investor base for founders. be. Multiple family office investors during a TechCrunch Disrupt panel said the easiest way to approach investors like them is to look for family offices that align with what the startup is trying to build.
Bruce Lee, founder and CEO of Kiebeck Wealth Management, says that when founders seek family office connections, they look to families that have made wealth in the field the startup is building. He said he should look for it.
“[Family offices] You need to look for areas where you feel you have an advantage, or where you feel your family has an advantage in a particular technology, thereby adding strategic value not only to the conversation but to the investment itself. “We can do that,” Lee said.
Elle Family Office principal Etty Lasallian agreed, adding that families are looking for businesses that complement their own.
“When families invest in things that are relevant to their business, it can bring a lot of value to your business as well as collaboration,” Lasallian said. “So typically we're looking for things that can complement each other.”
Lasallian and Lee added that this collaboration is not only about finding family offices, but is also one of the things that makes family offices great for investors. Lasallian said family offices tend to invest in companies they care about on an emotional level compared to traditional VCs. He added that when family offices invest, they can be more flexible and patient investors because they invest to see the company succeed no matter what.
“When you work with venture capitalists, you always feel like there's a gun to your head…you have to meet their goals,” Lasallian said. “When I work with a family office, I feel like I have more runway. I have more time. I feel like I can breathe more air when I'm working towards a goal.”
Lasallian and Lee say industry and regional conferences are a great starting point for founders looking to meet family offices in their respective industries, as family offices often host such events. he added.
Lasallian and Lee said founders should expect to market themselves differently once they have relationships with family offices. Start-ups can sell their dreams and aspirations to VCs, but family offices can't. Companies should be selling their predictions and metrics, not about becoming future unicorns.