Family Office Venture Capital Review 2023
This review takes a closer look at the venture capital landscape through a family office lens, examining the unique value that family offices bring to the table, the role that venture investments play in a family office portfolio, and the strategies that family offices use to achieve their desired level of exposure to the asset class.
Introduction
The immediate uncertainty ignited by the collapse of the Silicon Valley Bank (SVB) subsided as the FDIC stepped in to guarantee all deposits and took steps to secure funds for other mid-sized banks. Questions about oversight, capital requirements, and moral hazard came to the fore in the United State. Potential weaknesses in the banking sector spread to Europe, which saw UBS purchase its longtime rival Credit Suisse. For many of us who lived through the 2008 global financial crisis, this brought up vivid memories of that difficult period.
For startups and VC investors, the trouble at SVB highlighted the role of venture debt and the immediate banking needs of startups to meet payroll and pay vendors so they can continue to operate and grow. As examined in this review, VC is a high-risk asset class and these events draw that out in sharper relief. But if SVB’s collapse is indeed chilling start-up funding, then perhaps this is a time of opportunity for family offices in this space.
The Venture Capital Landscape
The talented entrepreneurs bringing their innovations to market are at the centre of the venture capital world. Startups need access to the capital, of course, and that’s the raison d’etre of VC investing, but most startups also need mentoring and support in areas such as business development that family offices are ideally positioned to provide either through their own internal capacity or through their networks.
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