FOA - Entrepreneurship in the Family Office.pdf - Summitas

Back to Basics
The Family Office Association
defines an SFO as follows: “A
single family office (SFO) is a
private company of dedicated
professionals exclusively
devoted to the investment,
legacy, and personal needs
of one wealthy family.” The
focus is on ‘investing,’ which
we take for granted as the
core business of a single
family office (SFO). We can
invest passively or actively,
but either strategy amounts
to simply providing capital
to enterprises. The other
phrase that is often used
when discussing SFO’s is
‘wealth preservation.’ Many
families have worked hard,
possibly over more than one
generation, to build their asset
base and at some point the
focus often shifts to preserving
wealth and managing risks. An
analogous mindset in sports
is when a favored and leading
team shifts their thinking
from trying to score and win,
to trying not to lose. They
become conservative, passing
and scoring less, and they
sometimes end up losing their
lead, and the game.
FamilyOfficeAssociation.com
Entrepreneurship in the Family Office
Many SFO’s that are
focused on preserving
wealth have forgotten
how to create wealth,
which the younger
generations then never
get to learn.
As a result, we hear the all too familiar
stories of generations who are ill-prepared to
provide for themselves or contribute to the
family’s assets. While preserving wealth is
important, many families built their original
wealth not by ‘investing,’ but by the other
seemingly forgotten method: actually creating
new operating companies. To go back to the
sports analogy, they played ‘offense.’ While
aggressive investing can also be a way to play
offense, entrepreneurship takes it one step
further. While there are many SFO’s that are
derived from, and still intertwined with, a
successful operating company, even most of