A couple of weeks ago, Crunchbase News analyzed direct startup investments made by family investment offices. We found that the growth rate of deal-making by these private groups that invest on behalf of one ultra-high net worth family (or sometimes a few) vastly outpaced that of traditional venture capital firms.
There is some anecdotal evidence that more family offices are making their first investments directly into startups (as opposed to investing in a VC fund as a limited partner). But we wanted to know which investment groups have the most skin in the startup investing game, so to speak.
What follows are brief highlights of some of the most active family investment offices, according to Crunchbase data. The chart below displays the names and associated deal counts from the top ten investors, as ranked by total venture deal volume.
The Omidyar Network is the most active in our ranking of family investment offices making direct investments into startups. Investing on behalf of eBay founder Pierre Omidyar and his spouse Pam Omidyar, a philanthropist, the network makes startup investments across all stages of the funding cycle. Many of its portfolio companies are headquartered in emerging economies. According to Crunchbase data, its portfolio is heavily weighted in education, information technology, and financial technology (FinTech).
Kapor Capital is led by Lotus 1-2-3 founder Mitchell “Mitch” Kapor and Freada Kapor Klein, an investor and founding team member of Project Include. The firm also makes investments across multiple stages of funding. And although the fund is mostly sector-agnostic, many of its portfolio companies are focused on mobile devices and services, education, and healthcare. Kapor Capital has a number of successful exits, including Twilio, Dropcam, and Bitly. Kapor Capital also participated in Uber’s 2010 angel round, which raised $1.3 million for the transportation company at a pre-money valuation of $4 million.
Webb Investment Network
Maynard Webb—formerly the COO of eBay, CEO of LiveOps, and co-founder of Everwise—co-founded the Webb Investment Network in 2010 with a LiveOps colleague named Michael Neril, who now manages his own fund called Spider Capital. Irene Webb serves as the firm’s CFO. Webb Investment Network has made seed and early-stage venture investments in companies like Okta, Zuora, Hipmunk, and Indiegogo. Although the firm now makes fewer publicly-disclosed investments (as compared to a couple of years ago), the fund is still active and growing its affiliate network.
J. Hunt Holdings
Headquartered in Vienna, Virginia, J. Hunt Holdings is a holding company for select investments by James Hunt. Hunt is also a managing partner at Lavrock Ventures. According to the firm’s website, J. Hunt Holdings invests between $100,000 and $1.1 million in early-stage ventures working in five main categories: video and sensing, data center management, social media, data security, and “other” sectors. The firm made three publicly disclosed investments in 2017. Its one public investment in 2018 (so far) was a $5.8 million Series A round raised by a health monitoring firm called Sandstone Diagnostics.
Hedgewood is a Toronto-based firm investing on behalf of Jesse Rasch, previously the co-founder and CEO at InQuent Technologies and WebHosting.com. The fund invests across different stages across a diverse group of companies, primarily in healthcare, SaaS, and financial services. According to Crunchbase data, the firm has made one investment so far in 2018 by participating in a $2.4 million seed extension raised by Jiffy, a Toronto-based marketplace for home service providers.
Co-founded by Cameron and Tyler Winklevoss, this eponymous family office is one of the only firms in this list that have made investments in the bitcoin and blockchain space. In 2017, the firm participated in initial coin offerings for Filecoin and Blockstack. Tyler and Cameron are also co-founders of Gemini, an exchange platform for bitcoin and other blockchain assets. The twin brothers were best known for Olympic-caliber performance on Harvard’s varsity men’s crew team and settling a lawsuit with Mark Zuckerberg for allegedly stealing intellectual property that would become Facebook.
Bezos Expeditions is the family office of Amazon’s founder Jeff Bezos. The firm makes venture capital investments in seed, early, and late-stage startups from a wide range of sectors. Previous portfolio companies include Workday, Twitter, Juno Therapeutics, and the media company Business Insider. The firm is currently invested in companies including GRAIL, Convoy, Pioneer Square Labs, Domo, and Rethink Robotics, among others. So far in 2018, the fund has made investments in UX testing platform Pulse Labs and Mark43, which develops software that allows police departments to collect, analyze, and share crime data.
Iconiq Capital is a multi-family office managed by Divesh Makan which invests capital from a number of high-powered Silicon Valley executives. According to coverage in Forbes and The Wall Street Journal, Makan’s clients include Mark Zuckerberg, Sheryl Sandberg, Jack Dorsey, and Reid Hoffman, among others.
The R-Group, LLC
The R-Group is a family office based in Portland, Oregon, founded by Estee and Rany Raviv. The firm’s portfolio is also rather sector-agnostic, but it tends to invest in SaaS or e-commerce businesses, many of which are headquartered in the Pacific Northwest. Prior portfolio companies include Practice Fusion, Notion, BillGuard, and Faraday Bicycles. Current portfolio companies include over-the-air charging technology developer uBeam, men’s fashion-inspired womenswear e-commerce shop Wildfang, and internet redundancy and optimization service Bigleaf Networks, among others.
Smedvig Capital has offices in the UK and Norway and invests on behalf of the Smedvig family, which acquired its wealth in the oceanic transport and offshore oil drilling industries. The firm makes investments at the Series A and Series B stage, and it tends to follow on for several subsequent rounds. Its portfolio companies are almost exclusively based in the UK and Scandinavia. According to the firm’s Crunchbase profile, Smedvig “has invested over £800 [million] of internal capital.”
The Leading Edge
What do all of these firms have in common? They sit on the leading edge of a number of curves.
First and foremost, the families these investors serve are definitely far out on the wealth distribution curve. After all, they can afford to employ an entire office full of folks whose sole focus is to manage and preserve their wealth. But, perhaps less obviously, these firms are among those on the leading edge of a trend we documented earlier: of more family offices making investments directly into startups.
It should go without saying that investing in startups is not for every high net worth individual or family (or even most of them). But as tech startups continue to attract younger generations, who will eventually take up the task of deploying a fortune, don’t be surprised if many of them look to the investment groups highlighted here for some inspiration.
Illustration: Li-Anne Dias