When looking to start-up or expand a business, almost all entrepreneurs are familiar with the major sources of funding available, including friends and family, venture capital, angel investors, and SBA loans, for example. But there is another source with which many people are unfamiliar. Family offices.
According to Investopedia, “Family offices are private wealth management advisory firms that serve ultra-high-net-worth (UHNW) investors. They are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individual or family. For example, many family offices offer budgeting, insurance, charitable giving, family-owned businesses, wealth transfer, and tax services.”
The Family Office Exchange estimates that as of 2018, there were about 10,500 family offices in the United States alone. The UHNW individuals and families can’t just drop hundreds of millions or billions of dollars into mutual funds and expect to preserve or grow their often-multi-generational wealth. So, in many ways, they act like Private Equity firms. There are some significant differences vs. the typical PE firm (think about your perception of Mitt Romney and his activities at Bain Capital, brought to light during his run for the Presidency against Barack Obama).
- Family offices are typically looking for long-term returns, not flipping a company in 3-5 years.
- There is an increasing push towards ESG (Environmental, Sustainable and Governance) investments.
- Many family offices have a mission to improve the world or some aspect of particular interest to them.
- Unlike competitive PE firms, there are associations of family offices that often work and/or invest together, sharing resources.
- But like PE firms, family offices aren’t likely to fund a start-up. They want to see a proven business with great prospects for long-term growth.
Could family offices be the answer to your need for capital to expand your business, acquire another company, or even for one to buy your business? It’s certainly worth consideration.
UnniCo can work with you to understand your objectives and help develop a strategy that includes the whole range of funding options, including Family Offices. Once the right strategy is clear, we can help you secure the funding. And if the investment matches UnniCo’s own objectives, we might even be the right financing option for you.