For years, if you wanted a piece of the next generation-defining company, you went through a fund. That was the agreement. You signed a lockup agreement that lasted for ten or more years, gave your capital to a general partner, and paid fees that accumulated silently. Since there was no viable alternative, the venture model essentially succeeded. Family offices, which are private, frequently secretive businesses that manage the wealth of extremely wealthy families, lacked the necessary infrastructure, deal flow, and, to be honest, the drive to succeed on their own.
This is no longer the case, and the change feels more like a gradual build-up of pressure until something gave.
The economics of large venture funds have become difficult to ignore. Before returning a single dollar to investors, a fund that manages five billion dollars and charges a two percent annual management fee collects $100 million annually. Over ten years, that’s roughly a billion in fees, regardless of performance. And that calculation has only gotten more uncomfortable as mega funds ballooned in size — SoftBank’s Vision Fund crossed nearly a hundred billion, Tiger Global deployed at historic speed during the pandemic boom — while the returns didn’t always follow proportionally. Family offices noticed. They tend to notice things like that.
In late 2025, Periodic Labs, a startup founded by former OpenAI and DeepMind researchers, received a $300 million seed investment from Bezos Expeditions and Hillspire, the family offices of Jeff Bezos and Eric Schmidt. It didn’t go via a fund. There was no GP taking carry, no blind pool, no quarterly update letter written in careful, cautious language. The families saw the wager they desired and immediately placed it. The fact that two of the world’s most advanced private capital pools decided to act independently at a scale that most venture funds couldn’t match at the seed stage makes the transaction worthwhile.
That deal might be more of a tipping point than a trend. However, the more comprehensive data does not imply that it is isolated. According to some estimates, family offices now account for almost one-third of all startup investment flows worldwide. Ten years ago, it would have seemed aggressive for many to allocate nearly half of their entire portfolios to private markets. This is where the money has been going for some time. The posture has changed.
This has a generational component that is frequently missed in the more general coverage. Older principals in many of these family offices are still dealing with the fallout from the 2021 valuation hangover and the dot-com collapse. They are skeptical of the venture narrative, which makes sense given that they have witnessed hype cycles come and go. But the next generation, the ones increasingly assuming control or at least influence within these firms, grew up watching venture capital produce the most concentrated wealth creation in modern financial history. They see Stripe, they see Airbnb, they see what patient capital in the right companies actually does. Instead of just writing a check to someone else’s fund, this internal conflict is forcing these offices to take a more direct, selective, and thesis-driven approach to the asset class.
What’s still unclear is whether most family offices have the infrastructure to actually operate this way at scale. Direct deals require sourcing, diligence, portfolio support — the unglamorous operational work that good venture funds do quietly and often well. Some family offices have hired for it. Others are learning in real time, sometimes painfully. Not every family that avoids a venture capital fund will receive the benefits that the fund would have offered.
Still, watching this unfold, it’s hard not to feel that something structurally has shifted. The previous system, in which institutional managers controlled access and patient long-term capital sat passively behind them, is becoming less restrictive. Family offices are not and most likely won’t completely replace venture capital. However, by default, they are no longer required to accept the terms that the venture offered. The negotiation is altered as a result. Additionally, altering the negotiation in finance affects nearly everything that comes after.
