Investments From Family Offices: Opportunities and Challenges

Happy New Year! Welcome to 2025. I hope you had a great holiday and are ready to soar.

We are starting this year with an interview with Mrs Abiola Adediran. I met her in a coaching and mentorship community and I remember purchasing one of her books on building systems in organisations. I always love reading her posts because they are so insightful and I knew she would be the best person to speak on this topic. Abiola Adediran is a Family Business Advisor, who works with enterprise families and ultra-high net-worth individuals in managing, growing, and preserving their wealth with the right structures for transgenerational wealth and legacy transfer. Family offices can be a great source of impact investment and in this interview, she provides insights that can help you position properly. Also, in today’s "Highlighted Resource" section, you will get an opportunity to "work" with her directly in 2025. Act fast as registration closes in 24 hours.?

For an early stage impact-oriented founder learning about family offices, could you share about family offices and the importance of their place in capital generation for founders?

Family offices are private wealth management entities created by ultra-high-net-worth families to oversee investments, estate planning, and philanthropic initiatives. They differ from institutional investors by offering personalized, long-term capital that aligns with the family's values. This makes them particularly important for early-stage, impact-oriented founders who need patient capital and strategic support. Family offices often invest in ventures that generate both financial returns and societal benefits, providing not just funding but also mentorship and access to valuable networks.

Examples like Nigeria's Dangote Foundation, Kenya's Chandaria Family Office, and the global Omidyar Network demonstrate the role family offices play in fostering impact-driven enterprises. To engage family offices effectively, founders should research their priorities, align their pitches with the office’s mission, and clearly articulate their business's societal impact alongside financial potential. Building trust and relationships is essential, as family offices prioritize partnerships that resonate with their long-term vision for sustainable impact.

You work with Genea family office, are there specific global or local issues that resonate most with the vision and is there an impact investment focus? Are family offices keen on impact investment?

At Genea Family Office, our impact investment focus aligns closely with both global and local priorities, such as advancing renewable energy, enhancing food security, and fostering financial inclusion. These areas resonate with the needs of African communities while addressing broader global challenges. Family offices are increasingly keen on impact investing as they seek to create a legacy that transcends financial returns. With the next generation of wealth holders advocating for purpose-driven investments, family offices are integrating Environmental, Social, and Governance (ESG) principles into their strategies. A relatable example is the growing trend of family offices in Africa funding startups that provide off-grid solar solutions, combining profitability with social impact. Such initiatives highlight how wealth can be a force for good while securing long-term value.

What sectors or industries do you prioritize and why?

We prioritize sectors that align with long-term value creation, social impact, and sustainability. Key industries include renewable energy, agriculture, healthcare, and education. These sectors address pressing global challenges while offering opportunities for resilient growth.

For example, investing in renewable energy not only mitigates climate risks but also aligns with global trends toward a greener economy, creating long-term value for families. Similarly, agriculture and agri-tech in Africa hold immense potential, contributing to food security and economic empowerment while leveraging the continent's natural resources.

Similarly, investments in innovative healthcare solutions and accessible education platforms can drive generational impact, ensuring families contribute meaningfully to societal progress.

What stage of business do you typically invest in, and how do you define “impact” when selecting investments? How do you balance financial returns with impact goals?

We typically invest in businesses at the growth and scaling stages, where the potential for measurable impact aligns with proven business viability. These businesses often have established operations but require capital to expand their reach and amplify their impact.

We define "impact" as a quantifiable, positive change in areas like social equity, environmental sustainability, or economic empowerment. Balancing financial returns with impact goals requires a disciplined approach to investment screening. We prioritize ventures with a dual focus: robust financial models and clear, measurable impact metrics.?

For instance, we assess how an education tech company improves access to learning while generating healthy revenues. By embedding impact measurement into our due diligence and tracking progress post-investment, we ensure alignment with both financial and societal objectives.

We define "impact" as a quantifiable, positive change in areas like social equity, environmental sustainability, or economic empowerment.

What qualities or characteristics do you look for in founders seeking funding? Can you share an example of a founder who impressed you and why?

When evaluating founders for funding, we look for a combination of strong leadership, a deep understanding of their market, and a clear commitment to sustainability and impact. Founders must demonstrate resilience, adaptability, and a capacity to navigate complex challenges. A well-thought-out business model with measurable impact goals and scalability is critical, as is the founder's ability to inspire confidence in their vision through effective communication and transparency.?

For instance, I once mentored a tech entrepreneur in East Africa who impressed me with their innovative approach to integrating clean energy solutions into underserved rural communities. Their deep understanding of local challenges, coupled with a scalable, tech-driven model, showcased their potential to drive meaningful change.

What are some common mistakes founders make and how can they improve??

One common mistake founders make is pursuing impact investments without aligning them with clear, measurable objectives. Founders often prioritize funding opportunities over defining how their ventures create sustainable social or environmental value. For instance, a renewable energy business might focus on scaling operations without addressing local adoption challenges, diluting its intended impact. Founders can improve by developing a robust impact framework that links their mission to specific metrics, such as job creation in underserved communities. Transparent reporting on these metrics builds credibility with investors and stakeholders.

Another mistake is underestimating the importance of stakeholder engagement. Many founders fail to actively involve community beneficiaries or collaborators, resulting in solutions that may not resonate with the local context. For example, deploying a water purification system in a rural area without understanding cultural or logistical barriers can lead to underutilization. Founders should adopt a participatory approach, co-creating solutions with beneficiaries and continuously refining their models based on feedback. This ensures relevance, maximizes impact, and fosters long-term support for their initiatives.

What’s one element you wish more founders included in their presentations?

One element I wish more founders included in their pitch presentations is a well-defined impact measurement framework. While many founders emphasize the potential positive effects of their business, few articulate how they will track and measure these impacts over time. For example, if a founder is pitching a sustainable agriculture initiative, they could include metrics such as the reduction in carbon emissions per hectare or the increase in farmer incomes as direct outcomes of their solution. This demonstrates a commitment to accountability and allows potential investors, including family offices focused on impact investing, to evaluate the tangible outcomes of their investment.

What’s the best way for founders to approach or connect with family offices? Are warm introductions preferred, or are cold outreach emails acceptable if done well? Do you have an example that stood out positively to you?

Founders seeking to connect with family offices should prioritize warm introductions whenever possible, as these connections leverage trust and credibility, often making the engagement more impactful. For instance, referrals from trusted advisors, mutual connections, or respected members within the family office network can significantly increase the likelihood of a positive response. However, cold outreach emails can be effective if executed thoughtfully. A standout example is a founder who emailed with a concise, tailored pitch highlighting a clear alignment between their impact goals and the family office's investment thesis, supported by metrics and a personal touch—this approach opened the door to a meaningful dialogue.

The key is personalization and research. Founders should demonstrate an understanding of the family office’s values, investment strategy, and priorities. For example, a family office focused on sustainability would resonate more with a pitch that directly connects their values with the founder’s green initiative. Avoid generic approaches; instead, provide a well-researched, authentic message, whether via warm introductions or a targeted cold outreach, to maximize engagement potential.

The key is personalization and research. Founders should demonstrate an understanding of the family office’s values, investment strategy, and priorities.

How involved does your family office get post-investment? Do you provide mentorship or connections beyond capital??

We take a hands-on approach post-investment, extending our role beyond capital to offer mentorship, strategic guidance, and access to a robust network of industry connections, helping the businesses refine their strategies, overcome operational challenges, and unlock new opportunities. Our involvement reflects our commitment to driving impactful investments that generate both financial returns and measurable societal benefits.

Are there particular challenges unique to family office funding versus other types of funding?

Family office funding comes with unique challenges compared to other funding types, primarily due to its personalized and often long-term focus. Unlike institutional investors who may have rigid criteria and standardized processes, family offices typically align their investments with the values, legacy, and goals of the family they represent. This can lead to extensive due diligence processes to ensure an investment aligns with their mission, which might prolong timelines for funding. Additionally, family offices often have a lower risk appetite and prefer bespoke, relationship-driven engagements.

Another challenge lies in generational dynamics within family offices. Different generations often have varying priorities, with older members favoring preservation of wealth and younger members leaning toward impact-driven ventures. This divergence can slow decision-making.

Entrepreneurs seeking family office funding must therefore be prepared to align their proposals with both the family’s legacy and evolving vision, addressing the nuanced expectations of multiple stakeholders.

What strategies have you seen founders successfully use to overcome these challenges?

One key strategy is presenting a robust, multi-generational vision that resonates with the family office's legacy-focused approach. By emphasizing shared goals, founders can create a compelling narrative that connects with the family's ethos.

Another effective approach is ensuring strong governance and operational transparency. Family offices often prioritize stable and well-structured ventures. Founders can address this by adopting best practices like formalizing boards, establishing regular reporting systems, and demonstrating resilience through stress-tested business models. Overall, focus on building trust and aligning long-term values.

What’s the most surprising misconception founders have about family offices?

One of the most surprising misconceptions founders have about family offices is the belief that they are purely financial entities focused solely on investments and returns. In reality, family offices prioritize a broader set of values, including legacy, sustainability, and long-term impact. For instance, a founder might pitch an aggressive growth plan to a family office, assuming the primary concern is immediate ROI. However, family offices often assess opportunities through the lens of intergenerational wealth preservation and alignment with the family’s philanthropic or societal goals. This misalignment can lead to missed opportunities for collaboration if founders fail to articulate how their ventures align with these broader priorities.

What’s one piece of advice you wish every founder knew before seeking funding from family offices? If you could give founders one tip to stand out, what would it be?

Before approaching a family office, deeply research their history, values, and philanthropic interests. Family offices often invest to align with their long-term vision and legacy, prioritizing businesses that resonate with their purpose beyond financial returns. For example, a family office with a history of supporting sustainable agriculture might be more inclined to fund startups in regenerative farming. Tailor your pitch to show how your business aligns with their goals, emphasizing shared values and the impact your venture will create.

Stand-out tip: Show resilience and strategic clarity. Share specific examples of how you've navigated challenges, pivoted strategically, or built resilience into your business model. This positions your business as not just a great investment opportunity but also a reliable partner aligned with the family office's ethos.

Worth Reading

2024 Recap of the African Family Office Ecosystem - Family Enterprise Insights

Beyond the Fundraising Pitch: Top 10 Reasons Family Offices Pass on Deals - Family Enterprise Insights

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End Notes

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