Family Offices Become Venture Capitalists

Those looking for startup capital have had a tough year. According to the Bloomberg US Startups Barometer, the average of deals, deal amounts, exits, and first financings in 2016 was flat, even with the better tone in venture markets over the past two months. The lull should drive entrepreneurs to focus capital-raising attention on alternative channels, including family offices. There are as many as 3,000 single family offices worldwide. That is a respectable list of qualified names, often with at-hand cash to allocate. Most family offices can look beyond the short-term financial objectives of traditional venture capitalists; they aim to spread wealth across generations. The real benefit to startup founders, however, is that family offices usually have broad discretion in choosing the investments that they will nurture.

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