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.