Entrepreneurs and business owners should bear the following in mind as they prepare to initiate their searches for suitable Family Offices.
1. A carefully planned, patiently executed, strategic search is the answer. As mentioned, Family Offices deal in secrecy (they believe it necessary to protect their families interests). As such, it is unlikely that you will find "BILL GATES FAMILY OFFICE" with a website, let alone one that details its investment manager, its current portfolio, and a “contact us” link. Be prepared to get creative with your search.
2. Family Offices deal in trust. Family Offices believe that trust between parties is the singular guiding principle for making an investment. As a function, it would behoove you to remember that “who you are and who connects you” is far more important that “what [sort of company] you are and what you are selling.” Cultural fit matters; positioning matters; quiet signals matter.
3. Family Offices seek involvement in journey. Family offices prefer a reasonable amount of involvement in the businesses journey, depending on their stage and the composition of their existing portfolio. Minority investments, which tend to be more the speed of "venture capitalists", are the diametric opposite of the control investments that Family Office seek.
4. Investment Stage matters. Family offices will sometimes invest at the pre-product, Late seed or Series A when the Family Has an emotional attachment to an industry or high amounts of success within an industry or vertical. They typically don’t invest small check sizes, regardless times are changing and Families need to diversify into alternative markets outside of ones comfort zone.
5. Family Offices tend not to take the lead. Very few family offices lead investment rounds, unless there is a long history with the entrepreneur. A quality/credible introduction goes a long way in both gaining the attention of a family office and for sure in goading them across the investment finish line. And naturally, a well developed HALO effect will rarely let you down.
6. Context and Emotion are king. Most Family Offices will be based in developed countries, even for families who generated their wealth in emerging market. As such, taking the time to frame the opportunity you are presenting or the problem you are seeking to solve in a way that they can connect with or in the context of their home countries will take you much further than a glossy deck and financial model, though both are important. #Familyoffice #Technology #investment