Family offices
A company set up to manage one wealthy family's money invests directly in your business, usually for shares. Family offices can be more patient and flexible than funds, but each sets its own rules, and you usually need an introduction to reach one.
- Shares
How it works
A family office is a company that manages investments for one family. Under the SEC's family office rule, it advises only "family clients" (family members, some key employees and family trusts and charities), is wholly owned by them and controlled by the family, and does not hold itself out to the public as an investment adviser. Because of that, it is not treated as an investment adviser under federal law, so it does not register with the SEC as one.
The SEC's small business office lists family offices among the usual sources of money for growing businesses raising larger sums, alongside venture capital funds and corporate investors.
How it differs from a fund: a family office invests the family's own money, not money raised from outside investors, so it has no fund life and no fixed date by which it must sell. Each family office sets its own aims, the size of what it invests, how involved it wants to be and how long it will hold. No public body describes the terms family offices usually ask for, so read each term sheet on its own merits.
Securities rules: selling shares to a family office is a securities offering by your company, usually under Regulation D, with a Form D filed within 15 days of the first sale. A family office with more than $5 million of assets under management, not formed to buy your securities, and whose investment is directed by someone able to judge its merits and risks, counts as an accredited investor, and so can its family clients when the office directs their investment.
Finding one: family offices do not advertise for investments, so most deals start with an introduction from a lawyer, accountant, banker or another investor. Anyone paid a fee tied to the money raised may need to be a registered broker-dealer.
Upsides and downsides
Upsides
- Patient money, with no fund deadline to sell
- Each family office can be flexible about the size, terms and kind of investment
- The family's own business experience and contacts can come with the money
Downsides
- Hard to find, since family offices do not advertise and most deals start with an introduction
- Each office sets its own rules, so there is no standard process or terms to compare
- Less public information about a family office's track record than about a registered fund
Risks
- A change in the family's plans or wealth can end its support for later rounds
- Rights over a sale or later rounds can put off other investors
- A family member or adviser who backed the deal can leave, taking the relationship with them
What it costs
- How it is priced
- Shares in your company, or sometimes a loan or a mix, on terms set by each family office
- Costs that are easy to miss
- Legal costs for the investment and the family office's due diligence
- Time spent finding and meeting family offices, usually through introductions
- Any rights the family asks for, such as a board seat or a say over a later sale
Varies widely. Each family office sets its own size of investment.
Selling shares? Ownership after each round: see what you would own after each round
Does it fit?
Could fit when
- You run a growing company with a track record, and will give up a significant share to the right investor
Unlikely to fit when
- You want to keep full ownership
- The business is very new, with little track record to show a family's investment team
- You have no route to an introduction
Who can use it
- Business types: LLC, S corporation, C corporation, Benefit corporation
- A plan and track record that a family's investment team will back
- An introduction to the family office, since they rarely take unsolicited approaches
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all private equity investment
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- Pitch deck and plan
- Ownership table
- Audited financial statements
Regulation and protections
Regulators: U.S. Securities and Exchange Commission (SEC); State securities regulators.
Who runs it: Private providers, nationwide.
A securities offering, so federal anti-fraud rules apply to everything said to the investor, and states can require notice filings and fees for Rule 506 offerings. A family office that meets the SEC's family office rule is not an investment adviser under federal law, so it is not registered or examined by the SEC as one.
The rules protect investors, not the company. The deal terms are what protect you.
Types of provider: Single-family offices investing a family's own money; Introductions through lawyers, accountants, bankers and other investors.
Also consider
What has changed
No changes since this page was published. It was last checked against its sources on October 20, 2026.
Sources
- 17 CFR 275.202(a)(11)(G)-1: family offices (eCFR, current text) · checked October 20, 2026
- 17 CFR 230.501(a)(12) and (13): family offices and family clients as accredited investors (eCFR, current text) · checked October 20, 2026
- SEC Office of the Advocate for Small Business Capital Formation: annual report, fiscal year 2024 (common funding sources by business stage) · checked October 20, 2026
- SEC: Exempt offerings (Rules 506(b), 506(c) and Form D) · checked October 20, 2026
- SEC: Broker-dealers (when someone paid to help find investors must register) · checked October 20, 2026
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