Single- and multi-family offices are becoming more popular in the investment world. Like any other investor type, family offices are prone to certain challenges. As an early stage VC accelerator, we at Accelerating Asia have seen many of these first-hand, since we’ve partnered with a range of family offices across Asia Pacific.
While some of these family offices co-invest in one of our portfolio startups, it can be beneficial for family offices to choose a VC fund for investment. Investing in a fund becomes their way of building a bespoke startup portfolio, accessing qualified deal flow, and addressing some of the core challenges that come with being a family office.
Partnering with a VC accelerator bonds leaders together with a shared purpose.
When you have the capital of a family office, investing for pure financial returns is easy. Investing, on the other hand, to generate a return and make an impact is infinitely harder. Family members will naturally disagree on the investments that achieve these goals, since their personal values may differ wildly from one another.
The startup and tech world may represent common ground for the relatives in a family office. Supporting startups, after all, boils down to backing the very community, country, or region you live in: You’re propping up the visionary founders who want to improve the world around you through technology and innovation. That’s an easy mission to rally around.
At Accelerating Asia, we bring family offices the very best of these founders. Given that we receive more than 1,000 applications per year, the 1.5% of startups that make it into our portfolio represent only the most promising of startups. These are more likely to bring you a return and shape the world in which we live.
Select investment firms can provide a bespoke startup portfolio.
Family offices, by definition, are bespoke portfolios: They are composed of the unique investments that the various family relatives want to invest in. Such family offices are understandably hesitant to work with some investment firms, who may take a one-size-fits-all approach to external investors.
These investment firms may try to force family offices to invest only on their terms: You have to invest X amount, across Y startups, for Z years. At Accelerating Asia, we do not limit family offices into a set formula, understanding that many family offices often want a truly bespoke startup portfolio that includes follow-on investments or even engagements with external companies outside a given cohort.
To give them this white glove experience, we provide family offices with startup introductions and investment opportunities deeply aligned with their overall mandate. These startups may work in a specific vertical, operate in a particular market, or feature leaders from a target background, such as women founders. In this way, the startup portfolio can represent an extension of - rather than a deviation from - the mission and vision of a given family office.
Partnering with a VC accelerator gives family offices a promising new asset class.
Forward-thinking leaders at family offices are always on the lookout for new assets. No matter whether they’re part of the older generation or the next generation, they all want the same thing: To diversify investments into promising new assets.
Tech startups meet this criteria. While they are riskier than more traditional investments, the potential payoff from a successful startup, which happens when one exits via acquisition or initial public offering, is many multiples higher. Just imagine being one of the first investors into Canva, Grab, or other unicorn in Asia Pacific.
Investing into startups may also have a beneficial impact on the rest of the family office portfolio.
One common issue is that family offices can plateau. While the family may have been aggressive in accumulating the wealth it took to start the family office, many of them are often conservative in the aftermath, content to merely maintain rather than grow this capital.
This conservatism may cause stagnation, when relatives are not decisive enough in choosing how to invest, leaving capital undeployed. This counter-productive attitude cannot happen in the tech world: Because startups move fast, individual decisions must be made faster. At Accelerating Asia, we get our family offices in on the action, who can mentor founders, serve on our selection committee, or participate in other ways.
The family offices who work with us in this capacity have reported a kind of positive cross-pollination. The agility that they get from collaborating with our startups also spreads to their other investments, which benefit from their quicker decision-making and protect them from the rut that can commonly befall family offices.
Overall, we understand the needs of family offices across Asia Pacific and have designed the investor experience to cater to them. Family offices who work with Accelerating Asia enjoy a bespoke, purpose-driven, and action-oriented portfolio.
If you’re a single- or multi-family office who wishes to enjoy the same investor experience, consider investing into our latest fund.
Accelerating Asia invests in startups with scalable technology solutions and revenue generating business models that combine purpose with profit.
In making an investment decision, investors must rely on their own examination of startups and the terms of the investment including the merits and risks involved. Prospective investors should not construe this content as legal, tax, investment, financial or accounting advice.