Getting Deals Done with Family Offices – As I prepare to participate on another family office panel next week, I was on a call with a few other family offices discussing our panel together.  It lead me to thinking about the old topic of how to get transactions completed with family offices.

The common misconception remains that family offices write checks for anything and everything. It cannot be further from the truth.

95% of family offices will not even take a meeting from you.

Family Offices only write checks on 2-3% of the transactions they see.  

Now it also important to understand that family offices come in many shapes and sizes. Some families are strictly liquid investors, others run an operating company and do not invest into other people’s transactions, while others look to align with talented real estate operators, businesses, and entrepreneurs.  It is important to understand the family office you are approaching.

How do you get through the doorway?

It is all about relationships. Many family offices only listen to deals within their networks, whether they are formal or informal deal flow networks, roundtables, or just general dialogue among other like-minded family offices.

With that being said, it is effective to build relationships with those who have the trust of the people you desire to align with.

I generally allocate a portion of my day taking certain meetings or calls as long as I know people respect my time.  I am always willing to listen, open a relationship, and provide feedback. If I believe in the people and see a natural alignment of interests with another party – whether it involves capital, business development, or any other inner circle relationship that can benefit one another – I am happy to bring this value.  It is what many of us do as family offices.  We take leadership in bringing together good people and profits.

Here is the caveat – respect our time.

Here’s why…

The average family office – even some of the more discreet ones see a lot of emails per day.  I average over 300 emails per day personally.  If you want quick feedback, I have a specific memo format I require.  This gets you that quick “no” that everyone respects.  The average family office writes a check on one (1) to three (3) transactions for every hundred they review.  You improve your efforts to be one of those few when you come through an inner circle relationship.

Here are a few other points I can share:

Do not cold call and pitch a transaction. Just build a relationship. Build Familiarity.

Do not ask for a phone call just to run a scenario by somebody.

Be specific when discussing a transaction.  I was contacted yesterday about a transaction for us internally. The introducing party did not outline where the real opportunity was for us.

Do not hold up introducing a transaction by requiring a NDA just to see if we are interested. There is plenty of meaningful information that can be provided without an NDA.  Please keep in mind that a simple two-sentence email can serve as a preliminary NDA.

It is a small world.  Never forget this.  We talk to each other as family offices. Families often share deals within our inner circles because some seek other families to co-invest, some families act in an intermediary role to advocate for good people.  If you stand out from the crowd, we all tell others. This could be good or bad for you – if you understand what we mean.

Finally, keep this in mind from the person reading your email…of the 250 – 300 emails we see each day, how do you differentiate from the rest of the pile?

Let’s Talk.

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