After guiding a variety of financial institutions ranging from hedge funds to family offices and evaluating investments/portfolios from all ends of the spectrum it’s interesting how family offices in particular are taking off now– with the magic of tech founders/entrepreneurs orchestrating big exits playing a large part in this.
When it comes to establishing a family office after an exit whether it’s in the technology space or any other investment arena it all comes down to a few things:
For one, we have been receiving many questions around what is the minimum investment to launch a family office, which in itself is somewhat flawed because if you have to ask that question it creates a sense of instability and foreshadows what’s to come. You create a family office when the time is right. Period.
Secondly, on the other hand, if you’re the founder of a company and just choreographed an exit and are now sitting on $500M you gotta make moves… But where? That’s when you might want to explore creating a family office so your loved ones benefit for generations to come.
Lastly, after creating a family office your investments need to be diversified based on a confluence of factors along with the team you have in place and you should also think about giving back to the world and how that ties in. And that’s why family offices typically start out by investing in opportunities to increase their wealth and then pivot to other philanthropic ventures to do good in the world (Gates and many others).
The moral of the story is that sound investments are based on a multitude of factors and family offices need to create a strategy around what makes dollars and what makes sense while planning for the next steps which oftentimes becomes launching a foundation or other philanthropic initiatives.
And no matter how much wealth has been accumulated, the true joy of a successful life should be the desire to give back and help others.