A large transfer of wealth between generations is under way. Research firms estimate that tens of trillions of dollars will pass to heirs and charities in the United States alone over the coming decades. As younger family members take on leadership roles in family offices, they are bringing different priorities, habits and expectations.
For founders and fund managers raising capital, understanding these shifts is increasingly important. This guide explains how next-generation principals tend to invest, where tensions arise with the older generation, and how to engage them effectively.
1. What Is Changing
- More direct investing. Many next-gen principals prefer backing companies directly or through co-investments rather than only committing to funds. See how family offices make direct investments.
- Greater interest in technology and venture capital, often reflecting their own careers and networks.
- Impact and values alignment. Many want investments to reflect social and environmental priorities alongside financial returns. See impact investing 101.
- Openness to new asset classes, including digital assets and emerging sectors such as climate technology and AI.
- Hands-on involvement, including board roles, operational support and building their own investment teams.
- Digital communication and data-driven reporting.
2. Where Tensions Arise
- Risk appetite. Founders of family wealth may prioritise preservation, while heirs may want to build and take more risk.
- Governance. Decision rights, investment committees and family constitutions can be tested during transition.
- Legacy holdings. Younger members may want to diversify away from the family's original business.
- Impact priorities. Different views on ESG and impact can lead to disagreement about what to own.
3. How Family Offices Are Adapting
- Professionalising, with dedicated investment teams, clear processes and external advisers.
- Separate next-gen allocations, giving younger members a pool of capital to manage and learn with.
- Formal governance, including investment policies and family councils.
- Collaboration with peers, co-investing alongside other family offices to share diligence and access deals.
For how structure affects deal appetite, see single vs. multi-family offices.
4. How Founders and GPs Should Engage
- Understand who decides. Next-gen principals may influence decisions without having final authority.
- Speak to values and returns. Show impact alongside financial performance where relevant.
- Offer involvement, such as advisory roles or co-investment opportunities, where appropriate.
- Be transparent and data-driven in reporting.
- Build long-term relationships. Family offices value trust and often invest over many years.
See also family offices vs. venture capital.
5. A Practical Example: Two Generations, One Decision
Consider a hypothetical family office built on a manufacturing business. The founding generation still chairs the investment committee and prefers income-producing assets. A daughter who worked in technology now runs a separate venture allocation.
A founder pitching a supply-chain software company meets the daughter first. She is enthusiastic, but a cheque above her allocation limit needs committee approval. The founder who succeeds here does three things: makes the case for the technology to the daughter, explains to the committee how the company connects to the family’s industry knowledge, and shows clear downside thinking — runway, milestones and what happens if the next round is delayed. Speaking to both generations, rather than only the one who took the first meeting, turns interest into a decision.
6. Preparing for a Meeting With a Next-Gen Principal
- Research the family’s history and holdings so you can explain why your company fits — or honestly acknowledge where it does not.
- Have impact data ready if it is relevant, and be specific about how you measure it rather than relying on broad claims.
- Prepare a short digital summary that can be shared easily with other family members and advisers.
- Clarify the ask and the role you are offering, whether that is a direct investment, a co-investment or an advisory relationship.
- Plan your reporting. Show how and how often you will update investors after they commit.
7. Common Mistakes to Avoid
- Assuming the next-gen contact is the final decision-maker.
- Overplaying impact in ways that cannot be measured or verified later.
- Treating the family office like a fund with a fixed process and timetable; many move at their own pace.
- Overlooking privacy. Families often expect discretion about their involvement.
Frequently Asked Questions
Do next-gen family office principals invest differently?
Many favour direct investments, technology, impact and hands-on involvement, though preferences vary widely across families.
Are family offices becoming more active in venture capital?
Yes. Many family offices, particularly those led or influenced by younger generations, have increased direct and fund investments in venture.
How can founders reach family offices?
Through trusted introductions, investor networks and events, since many family offices prefer privacy and relationships over cold outreach.
Is impact investing a priority for next-gen principals?
For many, yes, though they typically still expect competitive financial returns.
The Bottom Line
As wealth passes to a new generation, family offices are becoming more direct, more technology-focused and more values-driven. Founders and fund managers who understand these shifts, respect family governance and build long-term relationships will be well placed to work with this growing source of capital.
Global Capital Network connects founders and fund managers with family offices through our events and investor network. Get in touch to learn more.
This article is general information, not investment advice.
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