The Four Questions Every Founder Should Ask a Family Office

The family-office cliché is a patient billionaire writing early cheques into future unicorns. The evidence from Theranos, Sweden, Hong Kong, Saudi Arabia and pan-Africa tells a tougher story: durable family capital depends less on wealth or founder chemistry than on whether the investor has the expertise, governance rights, funding capacity and exit plan to own a risk properly.

In 2014, RDV Corporation, the DeVos family office in the United States, considered putting $50 million into Theranos, the blood-testing company promising to transform diagnostics.

It invested $100 million instead.

Court records in the Theranos litigation identify RDV as one of the C-2 investors. That means it belonged to a defined group of investors in the court material, rather than being a label for a special class of shares. The US Securities and Exchange Commission later charged Theranos with raising more than $700 million through false claims about its technology, finances and commercial performance. The core technology had not been independently validated by RDV before the commitment doubled, according to the Ninth Circuit court material.

That is not merely a cautionary startup story. It is the question underneath almost every founder's search for a family office: is this investor equipped to own this particular risk, or simply wealthy enough to take it?

Those are not remotely the same thing.

The popular picture of family capital is flattering. Find a wealthy family. Tell a sufficiently compelling story. Build chemistry with the principal. Patient money arrives, free from the quarterly pressures of ordinary finance.

Patient, perhaps. But patient for what?

The comforting story founders tell themselves

Li Ka-shing's Horizons Ventures, the Hong Kong technology investment platform, backed Facebook in 2007, Spotify in 2009, Waze in 2011, DeepMind in 2012 and Zoom in 2013.

Those names are why the myth endures. They appear in pitch decks and conference speeches because they make direct family investment look wonderfully simple: spot the future early, wait, become very rich.

But the winners are a distorted sample. NBER Working Paper W20358, covering US venture investments made from 1985 to 2009, found that roughly 55% were terminated at a loss. Only 6% returned more than five times the money invested, yet that small group produced about half of gross returns.

That is venture's awkward arithmetic. The spectacular outcomes are real. They are just not typical.

UBS's Global Family Office Report 2026, which surveyed 307 offices across more than 30 markets, found that direct private-equity investments made up only 8% of 2025 portfolios. Public equities accounted for 32% and fixed income, meaning interest-paying debt, for 17%. UBS also identified liquidity constraints, valuation uncertainty and concentration risk as growing concerns.

At first glance, that looks cautious. Here is what the numbers do not tell you: an asset can look valuable and still be difficult to sell, difficult to price and difficult to support when it needs another cheque.

Only 49% of surveyed offices reported having a board or equivalent governance framework. The words “family office” tell a founder very little about whether there is a real investment machine behind the name.

What the Wallenbergs built instead

Investor AB, founded by Sweden's Wallenberg family in 1916, holds substantial positions in Atlas Copco, Ericsson, Saab and SEB, companies spanning industrial equipment, telecommunications, defence and banking.

Investor is a listed holding company. Exor is too. That makes both useful comparisons for private family offices, not because a private office and a quoted company are identical, but because they expose the same family-capital problem in public: how do you preserve influence over a concentrated portfolio while retaining a market price and an avenue for shareholders to sell? A private office faces the same trade-off, only with fewer obvious exits.

Investor combines ownership with board participation. At 30 June 2026, its adjusted net asset value was SEK1.215 trillion. Adjusted net asset value is the estimated value of investments and other assets after debts and relevant adjustments. Over 20 years, its shares generated an average annual total return of 16.5%. In 2025, total shareholder return was 15%, ahead of the 13% return from Sweden's SIXRX index, according to Investor AB.

The figures are impressive. The architecture is more useful.

Investor's holdings are concentrated, but they are not passive lottery tickets. The family has continuing influence, industrial familiarity, board access and an institutional structure designed to endure. Concentration becomes less reckless when an owner can understand the businesses, challenge management and withstand bad years.

What surprised us was not that Investor has done well. It was how often this model gets described as patient capital when the more accurate description is organised control. Patience is the visible feature. Governance is the engine.

The sale that proves permanence has limits

The Agnelli family's Exor, based in Italy and the Netherlands, supplies the next clue.

At the end of 2025, Giovanni Agnelli BV held 54.94% of Exor's economic rights but 83.97% of its voting rights. Economic rights determine the share of financial upside. Voting rights determine who can influence corporate decisions. Exor says it remains the reference shareholder in Ferrari, Stellantis, CNH and Philips, and that about 80% of its portfolio is in companies where it is the reference shareholder and active on boards.

Then there was PartnerRe, the Bermuda reinsurance business. Exor bought PartnerRe for $6.7 billion in 2016 and sold it to Covéa for $9.3 billion in 2022, according to Exor's shareholder and ownership information.

Exor's purchase of PartnerRe in 2016 and sale to Covéa in 2022 show that long-term capital can create value by exiting as well as holding. Photo: SurfAst / Wikimedia Commons, CC BY-SA 3.0.

That sale is the detail people tend to skip. Long-term ownership is not a promise to hold every asset forever. It is the freedom to decide when continued ownership is less valuable than liquidity for the next opportunity.

Exor's net asset value per share fell 8.1% in 2025. Control did not remove cyclical or execution risk. It gave Exor a steering wheel, not a road without bends.

Put Investor and Exor side by side and a pattern appears that neither corporate description says outright: family capital becomes powerful when it can both influence an asset and recycle value from it. The patient owner still needs an exit mechanism. Sometimes the exit is a listed share. Sometimes it is a sale.

Horizons had a machine behind the bets

Horizons Ventures is often presented as proof that family offices can win at venture investing through access alone. Its record certainly invites that conclusion.

But Horizons was founded as a dedicated technology platform with separate investment and scaling teams, according to Horizons Ventures. It was not casual angel investing conducted around other family business commitments. Its specialist venture activity sat alongside the Li Ka-shing family's controlled CK Hutchison businesses, a group operating ports, retail, infrastructure and telecoms. Those businesses generated HK$40.5 billion of operating free cash flow in 2025.

Operating free cash flow is the cash left from running a business after its regular operating and investment needs. In plain English, it is the money that can keep the wider platform functioning before anyone decides whether to make another high-risk technology bet.

CK Hutchison's HK$40.5 billion of 2025 operating free cash flow gave the Li Ka-shing family a base beneath its specialist venture bets. Photo: King Ho / Pexels, Pexels licence (free commercial use).

That cash flow is the quiet part of the story. It can fund specialist people, absorb losses and reduce pressure to sell quickly. It also separates high-risk technology investing from the operating businesses sustaining the wider family platform.

This is where founders commonly blur two very different things. Strategic capital brings relevant industry knowledge, customer relationships, distribution understanding or technical insight. Financial capital brings money, return expectations and a portfolio discipline.

The strongest family investors can offer both. The dangerous ones offer neither, except a large cheque.

Rich on paper is not liquid

Abdul Latif Jameel, the Saudi family business that has distributed Toyota vehicles in Saudi Arabia since the 1950s, invested in Rivian in 2018 through its automotive and mobility platform. That background made the investment strategically adjacent: this was a family already rooted in vehicles and mobility, not a random wager on an unfamiliar sector.

At Rivian's November 2021 IPO, Global Oryx, a family-linked entity, beneficially owned 113.9 million shares and warrants, equal to 13.1% of Rivian's Class A stock. Class A shares are a particular category of ordinary company shares. Warrants are rights to buy shares later at a stated price. At the $78 IPO price, the Global Oryx position represented approximately $8.9 billion before the cost of using those warrants, according to Abdul Latif Jameel's account of the investment.

Rivian's IPO value illustrated strategic access, but not necessarily immediate liquidity for a major shareholder. Photo: Photo by Rivian. / Wikimedia Commons, CC BY-SA 4.0.

A headline can stop there. An owner cannot.

That figure was principally market value, not proof of cash already realised. A lock-up, for example, is a restriction that can prevent or limit early sales after an IPO. Even without one, a major holder must consider practical sale capacity, follow-on obligations and the risk of having too much wealth tied to one company.

Here is the twist: an IPO can validate an investment without making the investor liquid. The valuation may be real. The spendable proceeds may still be somewhere in the future.

The wider venture market has the same tension. The NVCA's 2026 Yearbook reported $217.1 billion of US venture exits in 2025. Yet 859 unicorns, privately held companies valued at $1 billion or more, remained valued at $4.34 trillion. Only roughly 30 to 40 unicorns exited, while distributions to fund investors remained below historical norms.

An exit market can be active while a very large queue remains waiting. That is why an investor's reserves are not automatically your runway. Wealth does not mean capital is allocated, available at the right moment or approved for a follow-on round.

The family that turned history into a mandate

The Oppenheimer family sold its 40% stake in De Beers to Anglo American for $5.1 billion in 2012, after decades of control. Before that sale, it had established Tana Africa Capital with Temasek in 2011.

Temasek is Tana's institutional co-owner in this arrangement. Tana is an evergreen investor, meaning it is not built around a fixed deadline to sell every investment. Its mandate is explicit: African consumer, agriculture, healthcare, education and retail companies. It limits the number of investments, targets platform businesses and emphasises governance, financial discipline and operational improvement.

That matters because “Africa” is not an investment thesis and “we are long term” is not a mandate. Tana's model translates family operating heritage into a defined geography, selected sectors and a partnership structure, rather than assuming the proceeds of a historic sale automatically create expertise everywhere.

This is less glamorous than chasing every global technology breakout. It is more legible.

For a founder, that changes the outreach question. Do not ask whether family offices invest in startups. Ask why this family should understand your customer, regulation, supply chain or route to market better than another investor.

A database can identify names. It cannot create industrial relevance. Nor can it manufacture a mandate match or the trust required for a concentrated investment. Read why introductions are not the problem before mistaking a larger contact list for a capital strategy.

When edge matters less

There is an important qualification. EDGE is not equally decisive in every investment.

A family investor can sensibly be more passive or generalist when the asset is liquid, diversified and easy to price. UBS's survey helps explain why public equities are the largest allocation at 32% of family-office portfolios. A family does not need a board seat in every listed company to own a broad public-market portfolio. It can sell shares, reduce concentration and change course without negotiating an exit from a private company.

Investor itself demonstrates the value of the listed format, although it is not a passive investor: its shares provide market liquidity while its family-backed structure maintains board participation in core holdings.

The evidence does not prove that every successful investment needs a family-specific operating edge. It does show that the less liquid, more concentrated, more technical and more regulated an investment becomes, the less safely a family can rely on patience alone.

Theranos sat at that far end of the spectrum. A blood-testing claim in regulated science was not a situation where passive confidence or founder access could substitute for verification.

What businesses should ask before sending the deck

Use four filters before treating a family office as a credible target.

Edge. Does the family have genuine knowledge of your sector, geography, customers or operating problem? Strategic relevance must be specific, not decorative.

Decision rights. What information rights, board role or other meaningful influence will come with the money? Information rights are contractual rights to receive company information. The terms can matter as much as valuation, as the clauses that decide control and cash explains.

Gas tank. Who funds the next round if the company needs more capital? Look beyond stated wealth to reserves, cash flow and decision-making authority.

Exit. What happens if the obvious IPO or sale disappears? A credible investor should have an answer more detailed than “we are patient”.

Theranos makes the final point brutally clear. In regulated science, founder chemistry is not technical diligence. If an investor lacks independent specialist expertise, it needs to buy it, partner for it or decline the deal.

What experienced investors see first

First-time investors often see a founder, a market and an exciting forecast. Experienced family investors see a chain of risks.

Can we verify the central claim? Can we influence the business if it struggles? Can we fund our share of later rounds? Can we turn a successful paper value into usable liquidity? And, just as importantly, does this company fit an area where we possess more than money?

GI Network's view: A family office is not a category of patient money. It is a capital system with its own history, decision rights, blind spots and limits. The founder's task is to find the system that makes their risk intelligible.

GI Network would test that fit before outreach begins. In this situation, we would map families with real sector and geographic relevance, identify the governance rights they are likely to require, pressure-test follow-on funding and build a realistic liquidity narrative. We would then align the data room and investment case with the questions an investment committee will actually ask, rather than presenting a broad list of family offices as though each had the same mandate.

The aim is not more meetings. It is fewer, better-qualified conversations with capital providers that have a reason to own the risk.

The EDGE test

The evidence leaves founders with a simple test.

E is for edge: why does this family understand the opportunity unusually well?

D is for decision rights: what enforceable governance, information or board influence accompanies its capital?

G is for gas tank: what reserves, operating cash flow or co-investment capacity can support the business through a harder round?

E is for exit: if the expected sale or IPO does not arrive, how does value become usable liquidity?

Miss one of these and patient capital may be nothing more than patient exposure. Get all four and a family office can become something rarer than a wealthy name on a spreadsheet: an owner built for the risk ahead.