Five ways billionaire families find proprietary deals
Built on Chapter 11 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
Even well-known families that built famous products see fewer deals than an investment bank does. If that is true for them, think about a quiet family office with no website and no press.
Deals that come to you through a banker are usually shopped already. The best deals tend to be the ones you find yourself. In the book I laid out five ways families do that.
1. Build a calling team
If you want steady deal flow, call on business owners directly. Some families go further and set up a small team whose only job is calling past relationships and building new ones in one sector.
It sounds basic. It works because most investors wait for deals to come to them.
2. Speak at niche industry events
Say you want mid-sized food companies. Go to the top food industry conferences and share what you know about investing there.
When your family becomes a known face in an industry, you hear about deals before they reach every investor in town.
3. Use middle market associations
Many middle market groups look for family office speakers. When you describe your ideal deal on stage in plain numbers you get inquiries for years from the people in that room and their contacts.
4. Focus on 50 relationships
Without a clear focus you can drown in opportunity. You end up in too many calls about deals that will never fit.
Pick about 50 high-value relationships that are most likely to lead to the deals you want. Then work them well.
5. Use deal networks with care
Some networks connect investors and companies. Quality varies a lot. The better ones can help you find new sources and let people know what you are looking for. I would treat them as one channel, not the main one.
The fit with billionaire families
Large families are short on people. Their goals are bigger than their teams. Proprietary deal flow lets a small team spend its time on deals nobody else has priced.
It also fits how billionaire families like to work. They want privacy and long holding periods. A deal you found yourself usually gives you more of both.
Putting a sourcing week on the calendar
A sourcing program fails when it lives in someone's head. The families I see doing this well put it on the calendar. A typical week might include a block of outreach calls, one coffee with a banker or attorney in the target industry, and an hour reviewing the top 50 list.
They also write a one-page profile of the deal they want: industry and revenue range, plus where and how the family will be involved after closing. They hand it to everyone in their network. A clear profile makes it easy for people to send the right deals and skip the wrong ones.
Over a year, that steady rhythm adds up to dozens of real conversations with owners who were not yet talking to anyone else.
Track the source of every deal you review, then look back at the end of the year. Most families find that a small number of channels bring nearly all the deals worth doing. Put more time into those and cut the rest.
What to take from this
- Pick one sector and start a simple outreach program.
- Speak at one industry event a year and say exactly what you buy.
- Write down your top 50 relationships and review them monthly.
- Track where your best deals came from and do more of that.
Questions and answers
What is a proprietary deal? A deal you source directly from an owner before it is shopped to other buyers.
Why do family offices struggle with deal flow? Most stay quiet, have small teams, and rely on intermediaries.
What is the top 50 relationship focus? Narrowing your outreach to about 50 high-value contacts so you can work each one well.
Are online deal networks worth it? Some can help, but quality varies. Use them as one source among several.