Raising capital from family offices

Raising Capital in a Tough VC Market: Family Office Panel

Raising Capital in the Toughest VC Market | Family Office & Investor Strategies

Fund managers, sponsors and founders who are raising capital in a slow market and want to hear how family offices and investors think about it.

Worth quoting

Summary

A panel of family office and investor speakers discussed raising capital in a venture market described as being in its third year of the worst conditions for raising funds. One speaker told raisers to stand out, keep their pitch real and have their ducks in a row. Another described opportunistic, non-correlated strategies, including debt and equity acquisitions during a commercial real estate downturn.

Joe said his group is in fund six and does not have to ask hard for capital these days. He likes short asks tied to a discrete set of goals over the next 6 months, because the risk is lower. David focused on real prospects for return and on income, and pointed to out-of-favor midstream pipeline companies.

Facts from this talk

• The panel described the VC fundraising market as being in its third year of the worst conditions.
• One speaker said midstream MLP pipeline infrastructure is 70% gas but priced almost 100% correlated to oil.
• Joe said his group is in fund six and prefers asks for the next 6 months rather than the next 2 years.

General education only. Not legal, tax or investment advice.

5 key takeaways

1. Stand out and be different. The first piece of advice was to make the offer different, even in a crowded space like PR roll-ups. Raisers should be able to say what is unique and how they plan to grow money.
2. Keep it interesting but real. One speaker warned against grasping at straws. They suggested having your ducks in a row and being prepared for questions.
3. Look for the upside of downturns. A real estate investor said opportunistic acquisitions and debt and equity can stay relevant when value-add multifamily deals do not yet pencil. The idea is to repurpose strategies around the downturn.
4. Consider non-correlated alternatives. The same speaker named oil and gas, legal and healthcare as areas they see as less dependent on macroeconomics. The aim was resilience when fundamentals across a portfolio are under pressure.
5. Make short, specific asks. Joe said a small ask for the next 6 months, aimed at a discrete set of goals, reduces risk. It gives a line of sight to the capital going to work, and quick failures can become later successes.

Related questions

• 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.
• Do family offices invest in funds or only direct deals?Family offices do both.
• How do I find the decision maker at a family office?Start by meeting the family through advisors, events and the people who manage their investments.

Questions about this video

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