Alternative funds, technology solutions and fast-growth start-ups tips with Obediah Ayton
April 7, 2021
Fund-of-Funds and family offices guides with Obediah Ayton? So as a startup, how do you find these alternative sources of funding that offer such collateral benefits? The first and best thing you can do is look to your board and the connective network you already have. The ability to access GCC family office networks is something to consider when building your board and team of advisors. If your existing network has been exhausted, there are events and other opportunities that can bring you closer together with angel investors and family offices. This significantly lessens the influence to artificially maintain high watermarks to receive incentive allocations. Family office decisions are based squarely on investment fundamentals, where long-term value creation replaces the 2/20 mentality. As a result, investments are more than fungible capital. It’s a commitment to align with the entrepreneur on a much deeper level. The deep, global networks of the ultra-wealthy families are used to create opportunities for the startups — from providing strategic advice, intelligence and subject matter expertise, to tangible benefits like identifying contract manufacturers to assist with the development of hardware products.
All hubs are set in an identical structure – VentureRock SPICs, and follow the same formula to venture building – VentureRock OS®. “90% of all early-stage startups fail in the first 3 years. This is normal we wanted to change by changing how venture capital works in early-stage investing. The VentureRock OS® is how we organize not only capital but also strategists, problem solvers and industry-specific knowledge around our portfolio ventures”, says Xander van der Heijden, General Partner at VentureRock. The novel venture building system digitizes the investment supply-chain, from cap table to KPI reporting and legal agreements, to de-risk and unlock the free flow of capital throughout ventures’ lifecycle risks through real-time audited data. Further Venturerock OS® pioneers a 72-step methodology to systematically guide ventures from early-stage startups to fully compliant scale-ups. Director of Business Development at The Private Investment Group Obediah Ayton said “I am very happy to watch Venturerock demonstrate the way venture capital funds are now being deployed post covid here in the UAE. The portfolio companies within Venturerock are some of the most exciting and innovative we have seen and I have no doubt they will be a welcome asset to both the public and private sector in the Middle East.”
Obediah Ayton or the rise of a family offices business leader? Obediah Ayton is a trust manager at Ayton Family Office Trust and a consultant at Tennor Holding B.V., a specialist in family office business, AI driven accounting services, finance and accounting. Obediah Ayton on what happens when a Family Office takes the VC model: In addition, Family Offices want to avoid paying the typical “2 and 20” — a deal structure that requires investors to pay a 2 percent annual fee (some as high as 3 percent) to the VC firm on top of the 20 percent return on investment. This is why we’re seeing more of the mega-wealthy move away from only investing in private equity funds to increasingly working with their family offices to find the right types of direct investments that fit their long-term wealth-generation strategies.
Alongside this monumental shift in wealth, we are witnessing a modernisation of family offices here in the UAE. Family offices are not only selecting business models that allow for more control and greater returns but are also expressing a heightened interest in “impact investing”. Typically, this means investing in small or medium-sized organisations that are purpose-led and have a focus on sustainable or ethical business practices. As the number of UAE family offices and the pool of wealth amassed by them increases and is passed on to a new generation, the way they conduct themselves is evolving rapidly, investing in innovative, creative and socially conscious ways. SMEs should take note of this enthusiasm and use it to their advantage.
Obediah Ayton about how to raise money from family offices: Investment proposal: – When you have a specific project or investment opportunity, it is essential to prepare a list of suitable family offices before you contact them. Study the emotional interest within the Families history with specific areas or businesses. When creating the list, quality always beats quantity. Quality means: you should look for family investment offices which have previously invested in similar projects or are generally known for their open-minded investment style. Simply sending a generic mass mail to hundreds of family offices is rarely successful. While compiling the list already make notes about the SFOs and their investments – this will help you out later.
Right now is a great time to build close relationships with Family Offices for future capital raises! Have a Value Add: The hardest part of the relationship is maintaining it. After the relationship is started, the hard work arrives. You must demonstrate that you will provide clear value to the family office. The same principle must apply to your outreach and relationships. Demonstrate to the family office why your firm is the right one to be in contact with. What can you offer that no one else can — Is it a strong track record? Exceptional due diligence skills? Experience and insight within a relevant industry? Whatever the skill, emphasizing the trait is a critical component of securing the connection.
Obediah Ayton about the new definition of a billionaire is not the net worth but in achieving change in a billion lives: Sustainable investing will remain a core trend in the foreseeable future thanks to 85% of all sustainable investments meeting or exceeding investor’s expectations in the past year. When considering these types of investments, family office executives need to ask themselves whether their office has established its purpose within the greater scope of impact and sustainable causes and set clear objectives accordingly.