How family offices can evaluate emerging venture managers

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Family offices are often well placed to back emerging managers. They can move faster than institutions, commit at sizes that matter to a first fund, and judge people directly. The challenge is usually capacity: a small team evaluating managers alongside everything else. The answer is a focused process that tests the few things that matter most, rather than a shortened version of an institutional questionnaire.

Where family offices have an advantage

  • Speed and flexibility. Fewer committee layers mean you can commit before a fund's first close, when terms and access are often best.
  • Meaningful check sizes. A commitment that would be small for a pension can be an anchor for a $30 million fund, which can bring LPAC seats, better terms or co-investment rights.
  • Direct judgment. Principals often have operating or sector experience that lets them assess a manager's network and thesis firsthand.
  • Patience. Many family offices can hold through a full fund life without the pressure of short-term reporting.

A focused evaluation in five parts

  1. The person. Why this manager, why this strategy, and why now. Test sourcing and judgment through specific examples. See How to evaluate a first-time fund manager.
  2. The plan. Whether fund size, company count, check size, ownership and reserves fit together. See the Testing the plan section of this library.
  3. The terms. Fees, the GP commitment and governance. See What are normal venture fund fees and carried interest?.
  4. The operations. Administrator, auditor, counsel and reporting. See Operational due diligence for emerging venture managers.
  5. The references. Founders, co-investors and former colleagues, including people the manager did not name.

Single versus multi-family offices

A single family office can shape the program around one family's goals, timeline and interests, including direct co-investment. A multi-family office has to fit the program to several families, which often means clearer documentation, more consistent reporting and a stronger case for each commitment that other families can read. Both benefit from writing down why a manager was chosen, so the decision can be revisited later with the original reasoning in view.

Questions to settle internally

  • What role does venture play in the family's overall portfolio?
  • How much can you commit each year, and for how long?
  • Do you want co-investment, and do you have the capacity to evaluate it?
  • Who in the office will monitor each manager after the commitment?

Related questions

Weighing a manager right now?

Send us the manager you are considering and Dr. Itzel Moncada will give you a free second read on whether their plan holds together and what to ask next. Request a Second Read, or see how we work with allocators.

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