How do family office investors screen new investment ideas and monitor portfolios?
Short answer: A compelling deck may still fail this panel's screen if the business takes too long to explain or falls outside the office's expertise. Jack's food manufacturing example shows how industry knowledge can set a boundary before a deal is assessed.
A panelist on the mom test
A panelist says they take new pitches to their mother as a sounding board. They say the business should be explainable within a minute, and that simple ideas have served them best.
A panelist on founders' downside questions
A panelist says they ask founders what the downside was and how they could get out of it with profit. They also ask whether success brought the founder value and happiness. The speaker says cash may mean little if success leaves a founder unhappy.
Bill on market unease and portfolio monitoring
Bill describes a personal "twitch factor" for noticing unease about markets. He says a sounding board can help investors understand what is going on when they feel uneasy about whether to keep going or rebalance.
Jack on his family's industry focus
Jack says investors cannot know every industry and should focus on a niche. His family office avoids food manufacturing because they lack expertise there, and focuses on areas where they have knowledge and connections.
"the things that are easiest to understand that are uncomplicated are the ones that have done the best for myself"
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Michael Lee-Chin: Invest in what people will do next. He saw that his generation would shift from consuming to saving and investing. He chose wealth management companies over banks and insurers to avoid underwriting losses.
- Tom Rosen: Buy when the market is down. Tom bought a lot when the stock market almost collapsed and made a substantial profit. In the year that followed, oil and gas surged. So did some tech.
- Tim Draper: Teach children about money early. Give them a small allowance and have them earn and invest money in the stock market. Over time they learn to ask sharp questions about how a business works.
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Frequently asked questions
How do family office investors screen new investment ideas and monitor portfolios?
A compelling deck may still fail this panel's screen if the business takes too long to explain or falls outside the office's expertise. Jack's food manufacturing example shows how industry knowledge can set a boundary before a deal is assessed.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.