Every year, significant amounts of capital are directed towards startups by family offices. Recent data from PwC indicates that during the first half of 2023, family office investors contributed to 27% of the total value of startup deals.

While family offices are known to be heavily involved in startup investments, they are often elusive and challenging for founders to engage. This is mainly because they are not as publicly accessible or easy to locate as Venture Capitalists (VCs). However, several family office investors suggest that the most effective way to reach them is by identifying and approaching those whose interests align with the startup’s vision and direction.

Bruce Lee, the CEO and founder of Keebeck Wealth Management, advises founders to connect with family offices that have accumulated their wealth in the same sector as their startup. He believes that family offices can provide strategic value to the discourse and the investment itself, especially if they have a competitive advantage or expertise in a particular technology field.

This sentiment is echoed by Eti Lazarian, a principal at Elle Family Office. She believes that family offices seek to invest in businesses that complement their own. When a family office invests in a business related to their industry, they can offer significant value and collaboration, contributing to the overall success of the business.

Lazarian and Lee both emphasize that this alignment is not just crucial in identifying potential family office investors, but it also makes these family offices valuable investors. Family offices, according to Lazarian, often invest in companies they emotionally connect with, unlike traditional VCs. This emotional investment often results in a more flexible and patient approach to investing, with a genuine intention to see the company succeed, regardless of the circumstances.

Lazarian also points out the difference in working with VCs and family offices. While VCs often set high-performance goals, working with a family office feels less pressured and allows for a more extended runway to achieve the startup’s goals.

For founders keen on connecting with family offices in their sectors, both Lazarian and Lee suggest attending industry or regional conferences, as these events are often frequented by family offices. Once a connection is initiated, founders should be prepared to pitch differently to family offices. Unlike VCs, who may be sold on dreams and aspirations, family offices are more interested in realistic projections and metrics.