Raising capital from family offices
What Top Investors Look for in Deals and Sponsors
What Top Investors Are Looking for in Deals and the Partners They Trust
Sponsors and fund managers who want to understand how family office investors describe the deals, founders and partners they favor.
What stood out
- Know each investor's deal size. One real estate group looks for multifamily or commercial deals in the 10 to 50 million dollar range. Another wants operating companies with 2 to 10 million dollars of EBITDA. Matching your deal to the stated range comes first.
- Early stage tech needs revenue. The venture arm of one family office looks for companies that already have revenue. They do not have to be profitable. It often comes in at the angel or Series A stage and likes disruptive ideas that gain market share quickly.
- Founders with grit stand out. One panelist wants founders who could be dropped from a helicopter anywhere in the world and still figure out how to create value. The same panelist prefers founder-led companies and offers an operational playbook and AI tools.
- Growth and scale are different. The panel defines growth as revenue and costs rising at the same rate. Scale is when the top line grows faster than expenses. Investors who want scale look for that gap.
- Sponsors who do the groundwork. One panelist says many very large firms do not dig in the trenches. Their group tries to create value first, then brings the deal to investors. They favor hard assets, below replacement value pricing and good sponsors.
Summary
Deal sizes of 10 to 50 million dollars for real estate and 2 to 10 million dollars of EBITDA for operating companies come up early in this panel. Four family office investors describe what they want to see. One group buys multifamily and commercial property. Another backs angel and Series A technology companies that already have revenue. Moderator Mark, of Deep Due Diligence Investors, asks how sponsors can reach the front of the line.
The panelists stress founders with grit, people who execute rather than just talk, and sponsors who do hands-on work before taking a deal to investors. One panelist separates growth from scale. Another says venture backable companies can grow 100 to 200 percent a year. Networking is also called important as more work moves to computers and robots. One group reports about 75 deals so far.
Facts and figures
- Impex Capital Group is a single family office in Houston that manages a 2 billion dollar portfolio.
- Windward Equity targets companies with 2 to 10 million dollars of EBITDA.
- The venture group at Impex reports about 75 deals, often at the angel or Series A stage.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: What Top Investors Are Looking for in Deals and the Partners They Trust. 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.
Worth quoting
"Growth is when your revenue and your costs increase at the same rate. Scale is when you disconnect the two and your top line grows faster than your expenses."
"We dig in the trenches and try to create value before we take it to the investors."
"Venture-backable companies are companies that have the potential of doing, you know, 100 to 200% growth every single year with a market size of like 5 million plus a month."
Related questions
- 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.
- 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.
- Do family offices invest in funds or only direct deals?Family offices do both.
Questions about this video
What deal size does the real estate group look for?
The panelist from Impex Capital Group says the typical transaction is a multifamily residential or commercial deal in the roughly 10 to 50 million dollar range.
What stage of tech company does the venture arm back?
It looks for companies that already have revenue but need not be profitable. It often invests at the angel or Series A stage.
What is the difference between growth and scale?
One panelist says growth is when revenue and costs rise at the same rate. Scale is when the two are disconnected and the top line grows faster than expenses.
Put this into practice with the family office fit check. See all raising capital from family offices resources.
