- Family offices increase startup investments as VC funding declines
- They offer patient capital for long-term projects
- Founders must navigate unique dynamics when working with family offices
Cash Flush and Ready to Invest
Family offices, the private wealth management firms of the world’s richest families, are stepping up their game in the startup investment arena.
As venture capital firms grapple with market turbulence, these often-overlooked investors are seizing the opportunity to make more significant bets on emerging companies.
A recent Goldman Sachs report indicates that 41% of surveyed family offices plan to increase their allocation to private equity, including venture capital, in 2024.
Playing the Long Game
One of the key advantages family offices bring to the table is their ability to take a long-term view on investments.
Unlike traditional VC funds that typically aim for exits within a decade, family offices can afford to be patient, making them ideal partners for startups in sectors like biotech, climate tech, and longevity research that may require extended development timelines.
Not Without Challenges
Despite their growing influence, family office investments come with their own set of considerations for founders.
These include potentially smaller check sizes compared to VC firms and the need to navigate complex family dynamics.
However, the trend towards co-investments between family offices and venture firms is on the rise, offering a balanced approach that combines the strengths of both investor types.
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