Family offices are one of the oldest investment models, usually backing seed and early-stage ventures. However, in modern times, these offices have mostly been investing in startups indirectly, joining in on deals by angel investors, smaller venture capitalists or private equity firms.
In an attempt to get family offices directly involved and to open up more deals to these offices, Venture Catalysts has launched a FamilyOffice initiative, which will connect such investors with the most promising startups.
The FamilyOffice was launched in Mumbai and Venture Catalysts’ role is limited to that of a facilitator, extending support in the identification, curation, diligence and post-investment procedures leveraging the company’s experience in this domain. Venture Catalysts describes itself as an integrated incubator and typically invests $250K – $1.5 Million in early-stage startups.
Dr. Apoorv Ranjan Sharma, president and cofounder of Venture Catalysts, said the family office operations will be spread across Mumbai, Delhi, Hyderabad, London, Dubai and Singapore, anchoring the best deals involving both national and international stakeholders.
FamilyOffice will serve as the one-stop enabler for Venture Catalysts’ network members to invest in startups across sectors from angel stage to Series B round of investment. The initiative aims to boost funding prospects of India’s startup ecosystem by bringing in more opportunities at an early stage, providing opportunities for family offices to diversify their wealth and portfolio.
Atul Nishar, founder and chairman of Hexaware Technologies and a member of the NASSCOM Executive Council, believes that Venture Catalysts’ FamilyOffice will help such investors get the right asset allocation for maximised returns and reduced risk. “Investing in the exciting new world of startups up to certain % of the wealth – say 5 % to 15 % can improve overall returns,” Nishar added.
“As big family offices have a lot of wealth and their aim is not just to grow but also to preserve wealth across generations, they also take into account the startup’s alignment with the family’s value system,” said Amit Patni, Director of Campden Family Connect.
Family Offices Join The Investment Race
With time, even family offices have recognised the importance of investing in new ventures to diversify their wealth management portfolio. Various incubators and corporations have been trying to simplify the process of investment for these business families.
In February last year, LetsVenture, another big startup incubator, announced LV Titans to provide family offices with transparent data to enable informed investment decisions.
Ganesh Nayak, Director of LV Titans, had said during the launch that it’s about giving family offices a structured approach to investing in startups and venture capital. “They have largely been restricted to deals coming from their personal networks, and they do not have the bandwidth to compare various opportunities in the market. They also wish to be extremely private, and will not solicit deals openly,” he had added.
The venture fund’s family office programme primarily focusses on growth-stage startup deals in the $3 Mn – $10 Mn range. It does not have a fixed timeframe for the investors to exit.
Most recently, Waterfield Advisors, a multi-family office and advisory firm, also joined the race with a ‘Family Office Consortium’.