In our venture capital blog series we aim to give you the lowdown on the different types of venture capital firms, whether venture capital investment is right for your company, and if so, when – and how – you start pitching.
So far we have asked whether you really need venture capital investment, and if so, how to approach venture funds. This week we look at the lesser-known Family Offices and discuss how they could be a good avenue to go down for investment.
What is a Family Office?
A Family Office is an organisation that looks after the money of high net worth families – either one, or a number, depending on the firm. And part of this involves investing funds to maintain and grow their wealth.
So, rather than employing a Private Equity firm to invest on their behalf, a Family Office will invest directly, therefore not pooling investments across lots of opportunities.
How is a Family Office different to Venture Capital?
Unlike the more short-term nature of Venture Capital which have investment lifecycles of around 5 years, Family Offices do not have a deadline for exiting their investments. In addition, rather than the diverse portfolio of high risk, high opportunity companies that Venture Capital firms hold, Private Offices often focus on a smaller number of long term investments, using their expertise to still invest in companies with a good opportunity of high returns.
Family Offices are the less flashy cousin of Venture Capitalists, valuing anonymity rather than big investment announcements and talk of how deep their pockets are.
This investment strategy, and working style could be more complementary to some startups and worth a look for another funding opportunity.
Should I seek investment from a Family Office?
Due to the rollercoaster ride the global economy has been going on, Family Offices have started to redirect their investments to maintain the wealth of their investors.
If you prefer a more discreet way of doing business, Family Offices may be for you. Their management style may work with your team, and invest time to support your work and help you develop, plus the longer term investment approach means you may be able to nurture a long lasting and successful relationship where you can develop a strategy that doesn’t need to deliver immediately. You’ll find Family Offices through your investment network, and due to the confidential way they conduct business, will expect an introduction rather than a cold hello!
As with every level of fundraising, it starts with a killer pitch deck! Decksender can help you nail this and get it out to potential investors waiting to hear your ideas