Family offices and high net worth individuals are playing a more important role in the venture capital market in Silicon Valley, reports The WSJ.
In recent years, investment by individual investors (as opposed to VC firms) has been on the rise, and they are filling an important gap in the market, particularly for later stage investments, as the graphic that WSJ provided with the article shows.
There were a couple of examples, such as media entrepreneur Oakleigh Thorne and his family office, and Tom Miller the retired CEO Siemens Healthcare.
Established venture fund managers seek to bring in family offices and HNWIs for their capital but also their business acumen to help startups reach the next level of growth and industrial success, according to the article.
The advantage for the Family Office is the chance to make a less risky late stage investment, a segment they typically could not access in the past, and still have a chance at the kind of returns that a pre-Mezzanine type of investment that established VCs can achieve.