Five Channels for Finding Family Offices

23 Apr

By Michael Quigley, Director of Research, LSN

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As family offices have been increasing their exposure to direct private investments, the ability to contact these groups is benefitting fundraising entrepreneurs in a number of industries, including the life sciences. LSN’s research team has been building and maintaining dialogues with these groups for nearly three years and in doing so we have identified five strong channels for finding family offices.

1. Web/LinkedIn Search

Having recently discussed how the LSN Research Team uses advanced search techniques to uncover investors, I won’t go into too much detail here. Suffice it to say, many family offices, particularly those that are highly active in the life science space, have a significant web presence and can be identified by using Boolean Operators to target both Google and LinkedIn searches. As these groups have established these communication channels with the intent to be found, they also tend to be more open to outreach and the discussion of new opportunities.

2. Legal Firms

Family offices usually have legal representation that is often outsourced to a legal firm. These groups can provide a solid, trusted reference for young companies. If you have a relationship with a lawyer or legal firm, it is definitely worthwhile to ask if they are currently working with any family offices or high-net-worth clients interested in direct transactions in your space. Being referred by these groups can help your company bypass the fear that a family office might have of being scammed or duped.

3. Foundations

Family offices often contribute a portion of their assets to philanthropic organizations, including disease foundations, which can often foster introductions. Many foundations list major contributors on their websites and in press releases so that is a great place to start your research. These family offices often have direct ties with the disease the foundation is working with making them more likely to have interest in your opportunity. Being introduced through the foundation may be especially helpful if the organization has significant scientific expertise in the disease area and is able to validate your opportunity to the family office.

4. Academic Institutions:

Family offices, also often with a philanthropic motive, make significant contributions to academic institutions and frequently serve on the schools board. These Institutions often list board member and significant donors on their website, so those can both be great places to look. Additionally contacting the school or their tech transfer office can also lead you up the stream to who is funding them (pending they are willing to tell you). Family offices funding Academic Institutions do so in many cases to leave a lasting legacy and have a positive impact in the world, this desire to make impact can make them good targets for funding life science companies looking to impact healthcare.

5. Conferences

There exist a number of family office conferences that take place all around the globe. However, if you plan on going to a general family office conference without a direct investment focus, there will only be a small fraction of those in attendance that will be interested in your opportunity. Not all family offices go direct and not all of those that do invest in the life sciences. Also, many planners of these events are loose in their application of the label “family office,” so, if possible, it is important to conduct some due diligence on the attendees before signing up. In our experience a company has a greater chance of finding a fit with a family office when they attend a conference focused on an area that is connected with their technology.

These five channels have been valuable resources for LSN Research in the past and have led to a number of the relationships we currently have with family offices. However, as with any potential investor pool, you should not spend your time trying to contact and follow up with every family office you can find. While these groups can be more flexible with their investments and their level of risk tolerance than more traditional capital sources, not all of them are making direct investments into life science companies. You should be sure to research previous deals a family office has been involved with, perhaps by speaking with a mutual third party; this will let you know whether reaching out would make sense. If you are able to target them properly, family offices represent a significant source of financing for life science companies.

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