The renowned law firm Withers recently published an insightful article addressing a pertinent question in the investment world: Are family offices really competitors to venture capital firms? The answer, as explored by Withers, is a resounding no. Family offices and venture capital (VC) firms are not competitors; rather, they are potential partners that can benefit immensely from collaboration. Here’s a closer look at some of the factors Withers raised on why family offices should consider working with venture capital funds and how such partnerships can be mutually advantageous.
Patience: A Shared Virtue
One of the strengths of family offices is their patience. Family offices are known for their long-term investment horizons, which align well with the timelines required for venture capital investments. While it’s true that some family offices are keen on seeing early commercial results, the key is to recognise that venture capital is a long-term commitment. Successful VC investments take time to mature, and family offices, with their patient capital, are well-positioned to reap the rewards if they stay the course.
Passion: The Driving Force
Venture capital is often considered the “ugly duckling” of asset classes due to its high risk and uncertainty. However, it’s a field driven by passion. Successful venture capitalists possess a deep-seated passion for innovation, resilience in the face of failure, and an insatiable curiosity about people, businesses, and societal changes. For family offices to thrive in venture investing, they must develop a similar level of passion and focus. This passion is not just about financial returns but about being part of transformative changes and supporting groundbreaking entrepreneurs and solutions. This is a trait many family offices have in abundance.