Are you a startup looking for a family office investor?

13 June 2017

Our Family Office Group specialises in building deals focused relationships with a number of different investors, including family offices, private investment vehicles, family businesses and ultra high net worth individuals (UHNWIs), focusing on deal opportunities in the middle market or larger $250m+ cross border transactions.

Given our relationships with these clients, we are often asked for advice on broader strategic opportunities. One of which is venture capital and startup funding, which our Emerging Companies Advisory team helps clients with both the strategy and fundraising side of things.

We know that startups are looking for family office investors who are a fantastic source of capital. They provide not only cash, but patient capital, expertise, a smart money network, and the ability to open doors in ways that even blue-chip VCs cannot. Family offices and UHNWIs, can also work together and collaborate with startups.

Over the past 18 month or so, I’ve had requests from startups, fast growth companies, and even accelerators looking to raise capital from family offices and UHNWIs.

Let’s start by explaining what a family office might be (typically, but not exhaustively)

  1. “Family office” is a broad term, from single family offices, to multi-family, to discretionary asset managers, to larger trusts, family investment vehicles, family business off-shoots, one-man and his dog operations, to collectives of entrepreneurs and so on.
  2. They invest in a multitude of businesses, assets, financial instruments, public or private markets, and at varying levels of the capital structure.
  3. One family office might be an investor in direct corporate M&A of say, £300m enterprise value, non-performing loan portfolios, be a limited partner in two private equity funds and could also hold a few venture investments in some startups, usually friends and family related.
  4. Typically, a deals advisor like us will be involved in the first elements of those, helping identify and execute corporate M&A investments, and have our Portfolio Advisory Group or Restructuring team identify non-performing loans or turnaround opportunities.

So what is the process if you’re a startup looking for family office capital?

Be Patient with the Patient Capital 

Of course, family officers are busy. They will be fielding a number of potential investment options and unless you sit squarely in the area they have been looking for, they will evaluate and come back with questions as soon as possible.

Content is King 

Protecting your IP or concept is vital for you, but have faith that a family office will not be looking to nab your idea: so give them as much information and as many numbers as possible. This will help speed up the process and allow them to respond to you more quickly.

Don’t chase (too much) 

This goes for the advisor you are connecting through as well as the CIO of the family office. If they are worth being an investor, they will have you on their workstreams. The advisor is probably discussing several opportunities with them, and will have you on that list. If you chase them, you’re likely to turn them off very quickly and could make you look like you have no other potential investors, which isn’t a good sign.

Our Emerging Company Advisory team helps early stage fast growing companies with their strategy, from initial business plan review, right through to the close of institutional fund-raising rounds from professional investors. We work very closely with the Deals Origination team who focus on investment sourcing, appraisal and execution for sovereign investment funds, pension funds and large family offices on transactions.

 

Glen Waters |  Deals
Profile | Email | +44(0)20 721 23117

 

Omar Butt |  UK Deal Origination | Corporate Finance
Profile | Email | +44 (0)20 7213 8164

 

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