A new research report by former family office executive Brian Laung Aoaeh indicates that family offices can benefit from partnering with venture capital firms.
Abstract of Report:
Many more single- and multi-family offices are shifting capital to the venture capital asset class and away from other asset classes. In some instances such family offices are also seeking to do more direct technology venture capital investing. This is often motivated and driven by the desire of a younger generation of family members to direct capital toward innovations that will have a meaningful and positive impact in the world.
It is worth examining some of the pitfalls that such an initiative can encounter, with the aim of reducing the number of preventable mistakes that the people starting and managing such initiatives might make. Mr. Aoaeh suggests a partnership model based on co-opetition and positive-sum partnerships rather than zero-sum rivalries between limited partners (LPs) – the family office principals and executives who wish to invest in venture capital through fund investments as well as direct investments in startups AND general partners (GPs) – the individuals launching and managing emerging venture firms to invest on the basis of novel and unique investment theses and strategies that account for the unique period of human in history in which we find ourselves.
In this article early-stage investments refers to investments in Pre-Seed, Seed, and Series A startups. This report is uniquely deeply researched and is meant for senior decision makers at family offices in any part of the world seeking some help as they try to make sense of large volumes of sometimes contradictory and confusing information that is difficult to synthesize and distill into actionable conclusions.
“Family offices that invest as limited partners in a fund and co-invest alongside the fund get to benefit from the depth of their own expertise as well as the depth of the managers’ expertise. In my past life, I regret we did not co-invest more often with the managers we backed.”
– Brian Laung Aoaeh
The report is available for downloading as a PDF or readable in text-only format.
Brian Laung Aoaeh, CFA is Co-Founder and General Partner of REFASHIOND Ventures, a NYC-based, early-stage supply chain technology venture firm that invests in startups refashioning global supply chains. Information about REFASHIOND Ventures’ inaugural fund is available here: https://www.refashiond.com/seed.
SOURCES: REFASHIOND Ventures / Family Capital article, Family Offices Should Forge Partnerships With Venture Capital Firms Says Former FO Senior Manager . Materials republished with permission of Mr. Aoaeh.