The super-rich directly and through their single-family offices have always been involved in funding privately held companies.
Still, with the tremendous growth of the extremely wealthy, the amount of money flowing into these deals is annually likely to be in the many billions.
For entrepreneurs looking for funding and interested in tapping into the wealth and interest of the super-rich, a number of options are evolving.
According to Angelo Robles, founder and CEO of the Family Office Association and author of Effective Family Office, “We’re seeing more and more family offices joining mastermind groups with the primary purpose of uncovering exciting entrepreneurial firms. There are other benefits for senior executives and family members to join select elite mastermind groups, but networking with exceptional entrepreneurs tops the list. Also, for a host of reasons such as ensuring their privacy, the family offices disguise who they are when they participate in mastermind groups.”
“The ultra-wealthy are increasingly using retained intermediaries to source and, with the help of other professionals, to generate deal flow,” says Rick Flynn, managing partner of FFO Business Management & Family Office and author of The High-Functioning Single-Family Office.
“Over the last couple of years, we’re in more conversations with retained intermediaries discussing a wide range of services. One area that is in high demand is putting together and overseeing tax efficient structures single-family offices can use to make substantial investments in private companies. In our experience each retained intermediary is representing at least a billion dollars earmarked for direct investments.”
According to Miguel Forbes, investor and philanthropist, “While many of the very wealthy continue to invest in PE and VC funds, they are also looking for direct deals, and a growing number of multi-family offices and other professionals are looking to deliver the investment opportunities they’re interested in. Also, they are looking extensively to peers and other family offices who are able to connect them with high potential companies.”
The appeal of investing in privately held companies has always been strong among the super-rich and their single-family offices.
Today, however, the way they are connecting with high-caliber entrepreneurs is becoming more diverse including joining select elite mastermind groups, having retained intermediaries search out possibilities, and leveraging the capabilities of multi-family offices.
