Are family offices starting to eat VCs’ lunch?
With companies staying private longer and the number of listed companies decreasing, family offices are turning their interest towards venture capital, compelled by the investment opportunities in innovative technologies and new business models. So how will this increased influence from family offices affect an already shifting venture ecosystem?

What you need to know

  • The average single-family office deploying funds into venture capital now has around $989m of assets under management – demonstrating their growing influence on the venture ecosystem.
  • It’s no surprise that family offices are dedicating more time, resources and capital to venture capital, not to mention building in-house expertise to become even more sophisticated venture investors. Unconstrained by traditional fund cycles, they’re an attractive and logical partner for entrepreneurs, innovators, and venture funds.
  • However, venture capital remains the ‘ugly duckling’ of all asset classes, receiving the least resources and requiring the most work. It can be a steep learning curve for family offices, and competing directly with existing VCs may not always be the right strategy.
Investments Published on Simple January 20, 2022

With companies staying private longer and the number of listed companies continuing to decrease, more family offices are taking an active interest in private markets generally, and venture capital specifically, compelled by the opportunity to invest in transformative technologies and exciting new business models.

This is also fuelled by the overall size of the family office market, which has grown significantly over the last decade, both in terms of increased wealth as well as the number of family offices. The average single-family office deploying funds into venture capital now has circa $989m of assets under management; for multi-family offices, the figure is around $1.9bn.

So how will this increased influence from family offices on venture capital affect an already shifting venture ecosystem?

The evolution of venture investment

Today’s venture capital landscape is truly global in nature and rife with innovation – around everything from investment structures and deployment models to deal sourcing. Non-traditional venture investors such as Tiger Global are helping to reshape the sector with approaches predicated on rapid capital deployment, reducing founder friction, and accepting a lower return profile.

About the Authors

Kjartan Rist

Kjartan Rist

Venture capital investing

Kjartan is a Founding Partner of Concentric, the London & Copenhagen-based venture capital firm. He helps family offices gain a better understanding of VC investments and how to allocate towards this.

Connect with Kjartan Rist

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