RESI San Diego: Family Office Investors Discuss Strategy and What Makes Them Different

20 Jul

By Cole Bunn, Senior Research Analyst, LSN

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As the RESI San Diego event is now in the rearview mirror and we prepare to bring RESI home to Boston (Sept. 26th), we wanted to take a closer look at the Medtech Family Office panel session. Family offices are clearly a highly sought-after investor class and are not completely understood by a large portion of entrepreneurs. To that end, we’ve pulled out some of most insightful points that were discussed and distilled the panel session into this summary video to help shed some light on how family offices evaluate early-stage investments, how to reach them and what differentiates them from VCs and other early-stage investors.

Family offices are not a silver bullet for your financing needs

A lot of entrepreneurs mistakenly believe that finding a family office will solve all their fundraising woes i.e. long-term investors with less rigid requirements. While it is true that family offices tend to be more patient capital and more flexible with terms and deal structures (a result of not having to answer to LPs), these groups are in fact looking for a return and typically will be active either at the board or management level to hit milestones and create value. Additionally, as your company grows and matures, the capital requirements and expertise required for the healthcare space oftentimes necessitate bringing in deep-pocketed institutional investors, who family offices maintain relationships with.

Family offices are purposefully low visibility

Given that family office investors have no mandate or timeline to allocate money, they can wait on the best deals and entrepreneurs to surface, therefore their deal sourcing channels are much different than a VC or another institutional investor. Further, these groups tend to be very much relationship-oriented. Networking is a must to uncover these investors and begin building a relationship, with some of the best events to attend being a part of universities and tech transfer offices as well as focused partnering conferences, such as the RESI conference.

Family offices are not homogenous

This point can’t be stressed enough. While there are some common themes among these groups (mostly dictated by structure or lack thereof), they are largely very different. Some may be more philanthropically motivated as they are looking to fund research/companies pursuing indications that have afflicted their family while others act more like an institutional fund with a focus on returns. It is essential to do as much research as possible on each specific family office to try and find mutual connections and the best way to approach them.

Moderated by Michael Quigley, VP of Investor Research, LSN, the panel includes the following speakers:

  • Sean Kearny, Managing Director, Three Leaf Ventures
  • Kyle Williams, President, Bootstrap Incubation
  • John Kinzell, Sr. Life Science Analyst, The McNair Group
  • Julia Belaya, Director – Corporate Partnerships, Plug & Play Tech Center

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