As family offices evolve from wealth preservation vehicles to active investors, they’re creating powerful new dynamics in the entrepreneurial ecosystem that venture capitalists can’t afford to ignore. This transformation represents both opportunity and challenge for the venture capital industry.
The Entrepreneurial Migration to Family Office Structures
The lines between entrepreneurship and family offices are increasingly blurring. UBS’s Global Entrepreneur Report 2025 reveals that 31% of U.S. entrepreneurs surveyed plan to establish their own family office, signaling a significant shift in how successful founders are approaching wealth management and future investments.
“Entrepreneurs are increasingly interested in establishing family offices to manage their wealth strategically,” notes Benjamin Cavalli, Head of Strategic Clients at UBS Global Wealth Management. This trend isn’t surprising when considering the evolving profile of entrepreneurs experiencing liquidity events.
“What I find today is that entrepreneur’s going through liquidity events are much younger than those monetizing in the past. Being that these entrepreneur’s are builders, they want to continue building and creating. The family office can be the conduit through which they now make things happen. Post-liquidity event entrepreneurs, having now built up their human capital in how to build, now wish to take that acumen to multiple ventures. The family office is a way to help them scale their business building initiatives,” explains Mark Tepsich, Family Office Design and Governance Strategist at UBS Family Office Solutions.
Today’s exiting founders typically view their exit not as retirement but as a launching pad for new ventures. Having built significant human capital through their entrepreneurial journey, they’re leveraging family offices as platforms to scale their business-building initiatives across multiple domains.
“Entrepreneurs recognize that growing a business and managing investments require entirely different skill sets,” the UBS report emphasizes, pointing to the increasing demand for specialized investment guidance that family offices can provide.
Patient Capital: The Family Office Advantage
Unlike traditional venture funds constrained by specific investment timelines and return expectations, family offices can deploy truly patient capital. This flexibility creates a distinct advantage for portfolio companies seeking sustainable growth rather than premature exits.
According to UBS’s findings, 74% of entrepreneurs plan to maintain their current risk levels in their investment portfolios over the next six months, suggesting a steadier, more long-term approach to capital deployment compared to institutional investors who may face pressure for quicker returns.
“I’m willing to take on more risk for the business than my personal investments. You want to seize that opportunity and for that reason, it is wise to take more risk in business,” explains a materials handling and recycling entrepreneur from the Americas interviewed in the UBS report.
This patience extends beyond just financial runway. Family offices often bring a multigenerational perspective to investments, focusing on legacy impact that may take decades to fully realize—a stark contrast to the typical 7-10 year fund lifecycle of traditional venture capital.
Operational Expertise: Beyond Just Capital
Perhaps the most valuable asset family offices bring to venture investments isn’t financial but operational. With deep industry knowledge and established networks, family office investors can provide startups with critical resources that extend far beyond funding.
“When we collaborate with family offices, we gain access to unique perspectives and sector-specific expertise,” notes a Silicon Valley cybersecurity entrepreneur quoted in the UBS report, highlighting the mutual benefits these partnerships create.
This operational advantage is particularly powerful when family offices invest in areas where they have legacy expertise. The UBS data shows that 32% of entrepreneurs aim to focus on alternative business ventures beyond their core industries, creating opportunities for cross-pollination of ideas and approaches.
The Incubation Function: Lowering Barriers to Entry
Family offices are increasingly functioning as business incubators, providing infrastructure that significantly lowers barriers to entrepreneurship, especially for next-generation family members.
These offices can provide crucial back-office support—from incorporation and tax structuring to banking, accounting, HR, and insurance services—allowing new ventures to focus on product development and market entry without immediately building out administrative teams.
Once these ventures gain traction, they can gradually develop their own robust internal capabilities. This incubation function essentially transforms the family office from a wealth preservation vehicle to an entrepreneurial launchpad.
Governance Challenges in the New Paradigm
As family offices become more active in venture investing, governance becomes increasingly critical. Surprisingly, UBS’s report reveals that only 55% of surveyed companies had clear succession plans for senior leadership.
“Succession planning is top of mind,” says an Asia-Pacific entrepreneur who recently sold his gaming company. “I’ve been spending a lot of time with the senior management, nurturing them to make the crucial business decisions on their own.”
Family offices engaged in venture investing must establish clear governance frameworks that balance entrepreneurial risk-taking with wealth preservation objectives. Investment committees and external advisory boards can help maintain this balance while ensuring alignment between family values and investment strategies.
“Many entrepreneurs have not built up their private wealth as much as they could,” observes a Swiss machining equipment entrepreneur interviewed for the UBS report, highlighting a common tendency to prioritize business reinvestment over wealth diversification.
Strategic Implications for Venture Capitalists
For traditional VCs, the emergence of family offices as active venture investors presents both challenges and opportunities. To thrive in this evolving landscape, venture capitalists should consider several strategic adjustments:
1. Develop Collaborative Models with Family Offices
Rather than viewing family offices as competitors, forward-thinking VCs are creating syndicates that leverage complementary strengths. Family offices bring industry expertise, patient capital, and operational resources, while VCs contribute deal flow, due diligence capabilities, and portfolio management expertise.
These collaborations can take various forms:
- Co-investment structures where family offices participate alongside VC funds
- Sector-specific partnerships targeting industries where the family has deep expertise
- Advisory relationships where family office executives provide industry insights to VC teams
2. Adjust Investment Horizons and Expectations
VCs partnering with family offices must recognize and accommodate different time horizons. While traditional venture funds typically aim for exits within 5-7 years, family offices may be comfortable with significantly longer holding periods.
This divergence requires clear alignment of expectations at the outset of any partnership. Structured liquidity options—such as secondary sales or partial exits—can help bridge these different time horizons while maintaining collaborative relationships.
3. Leverage Family Office Networks for Deal Sourcing
Family offices often have deep connections within specific industries that can yield proprietary deal flow. By cultivating relationships with family office investment teams, VCs can gain access to opportunities that might not appear in traditional startup ecosystems.
The UBS report indicates that 47% of entrepreneurs plan to engage in private equity or angel investing in the future, creating a growing network of sophisticated investors with unique deal access.
4. Provide Value Beyond Capital
In a landscape where family offices can offer patient capital and operational expertise, traditional VCs must double down on their unique value propositions. This includes:
- Specialized portfolio support services tailored to early-stage companies
- Access to talent networks specifically designed for scaling organizations
- Systematic approaches to later-stage fundraising and eventual exit opportunities
“Understanding the family’s ethos is key,” advises an entrepreneur quoted in the UBS report, underscoring the importance of alignment between investors and founders beyond financial considerations.
Looking Ahead: The Future of Family Office Venture Capital
As this intersection between family offices and entrepreneurship deepens, several trends bear watching:
First, expect increasing professionalization of family office investment teams. As more entrepreneurs establish family offices, they bring sophisticated business building approaches to what were traditionally conservative wealth management structures.
Second, watch for new investment structures designed specifically for family office venture capital. These may include longer-duration funds, evergreen vehicles, and hybrid models that blend features of traditional VC with family office flexibility.
Finally, anticipate evolution in the advisory ecosystem surrounding these entities. New service providers specializing in the family office-entrepreneurship nexus will emerge, offering expertise in areas from governance to specialized deal structuring.
Actionable Takeaways for Venture Capitalists
For VCs seeking to thrive in this evolving landscape, several concrete actions can position them for success:
- Map your existing LP base for family office connections that could yield strategic collaborations beyond capital.
- Consider launching specialized fund vehicles with terms tailored to family office investors, potentially including longer duration periods or flexible liquidity options.
- Develop industry-specific value propositions for family offices with legacy expertise in particular sectors.
- Create transparent co-investment frameworks that clearly define roles, expectations, and governance mechanisms when partnering with family offices on deals.
- Build educational resources for family offices new to venture investing, positioning your firm as a trusted advisor in this growing space.
The intersection of family offices and entrepreneurship represents far more than a new source of capital for startups—it signals a fundamental transformation in how private wealth flows through the innovation ecosystem. For venture capitalists who recognize and adapt to this shift, it offers unprecedented opportunities to create value through new forms of collaboration with some of the world’s most sophisticated private investors.
