Raising capital from family offices
What Is a Family Office and Why Do Ultra-Wealthy Families Want One?
What is a Family Office & Why Have 10,000 Ultra-Wealthy Families Decided to Have One? | EP 2
Wealthy individuals, founders and families who are weighing whether to set up a family office and want a plain definition of the options.
In their words
"Just tracking those and making sure that everything stays updated and accurate is a part-time job in itself."
"Essentially, you're trying to holistically manage everything that touches your balance sheet, everything that you do financially. Think about charitable giving, about next generation planning."
"A family office is an ultra wealthy investment solution for families or individuals who are worth 10, 15, 20 million dollars, several hundred million dollars or several billion dollars."
What you will hear
A family office is an investment solution for ultra wealthy families, and this talk from a Las Vegas conference defines three types. A virtual family office suits families worth about 10 to 50 million dollars. A single family office gives a family a dedicated full-time team. A multi-family office is a wealth management firm that serves 5, 10, 20 or several hundred ultra wealthy clients.
The speaker then explains why wealthy families set one up. Mistakes grow more expensive as net worth rises, and a team of four to six professionals can help avoid them. Keeping track of entities, equity stakes, paperwork and deadlines also takes real time. The talk ends by pointing to the next video on values, plus a family office dashboard and the book How to Start a Family Office.
On the record
- A virtual family office is described as fitting families worth about 10 to 50 million dollars.
- A single family office can mean a dedicated full-time team of four to six professionals.
- A multi-family office often serves 5, 10, 20 or several hundred ultra wealthy clients.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: What is a Family Office & Why Have 10,000 Ultra-Wealthy Families Decided to Have One? | EP 2. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around family office structures, entity and trust records and tax planning considerations. Do not use AI to write your own legal agreements.
The 5 big lessons
- Three types of family office. The talk names a virtual family office, a single family office and a multi-family office. Each fits a different level of wealth and a different need for a dedicated team.
- Mistakes cost more as wealth grows. The speaker says a small mistake might cost a hundred thousand dollars at one level of wealth. At a hundred million dollars, the speaker says a mistake might cost a million dollars.
- Admin work piles up quickly. Dozens of entities and equity stakes need up-to-date records. Deal closings, wire transfers, deadlines and incoming paperwork add to the load.
- Defense and offense both matter. A team of four to six professionals can help avoid mistakes. It also frees the owner to spend time where it earns the most or matters most personally, monetarily or philanthropically.
- Manage everything on the balance sheet. The aim is to manage holistically everything that touches the balance sheet. That includes charitable giving, next generation planning and family values, along with other financial considerations.
Related questions
- How long does a family office take to make a decision?There is no standard timeline, and I would not trust anyone who gives you one number.
- Do family offices co-invest alongside other investors?Yes, many family offices invest alongside other investors, and they often feel more comfortable when another respected investor is already in the deal.
- What is the difference between single and multi-family offices?A single family office works for one family and is built the way that family wants.
Questions about this video
What are the three types of family office?
The talk describes a virtual family office, a single family office and a multi-family office. The virtual type suits families worth about 10 to 50 million dollars, while the single type uses a dedicated full-time team.
What is a multi-family office?
It is a wealth management firm focused on the needs of the ultra wealthy. It often serves 5, 10, 20 or several hundred clients who are all ultra wealthy.
Why would someone want their own family office?
Mistakes become more expensive as wealth grows, and a dedicated team can help avoid them. It also handles tracking of entities, equity stakes and deadlines so the owner can focus on the best use of their time.
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