Running a Family Office Under $100M

If you're a tech founder sitting on $20M, $50M, or $100M+, you're already on one of the Advanced Levels of the Wealth Game.

The next big challenge?

Capital Concentration Risk and Coordination Failure.

Without a system to manage liquidity events, private investments, tax obligations, family governance, and cyber threats, your empire can crumble faster than you think.

A "family office" is that system.

Think of it as a command center for managing your capital, life, and legacy.

You don't need $500M to start. In fact, many digital-first founders effectively run family offices with less than $100M and are smashing it.

To do that effectively, you need a tactical setup. A family office brings order, resilience, and scalability to your financial life. It gives you control, privacy, and a professionalised system for managing wealth and capital preservation.

Let's break down how to run a family office that doesn't break the bank, maintain privacy, and add value beyond what your wealth advisor already does.

The Family Office Archetypes

Before diving into models, understand where you fit among the family office archetypes:

Visionary Entrepreneur Family Office

• Profile: Established by tech entrepreneurs who've exited their ventures
• Strategy: Bold, high-risk/high-reward approach focusing on direct investments in startups
• Advantage: Industry connections and insider access to discover the next unicorn
• Challenge: Balancing growth ambitions with wealth preservation

Traditional Business Owner Family Office

• Profile: Typically, first-generation business owners
• Strategy: Conservative, low-risk investment approaches
• Resources: Heavy reliance on banks, multi-family offices, and personal networks
• Challenge: Often lacking a formalised investment thesis

Embedded Family Office

• Profile: Minimal setup integrated within the founder's operating business
• Strategy: Passive investments in familiar or complementary businesses
• Advantage: Low overhead by leveraging existing business infrastructure
• Challenge: Limited independence from the core business

Professionalised Family Office

• Profile: Sophisticated setups with an in-house Chief Investment Officer (CIO) and larger AUM
• Strategy: Clear portfolio strategy targeting either preservation (5-6% returns) or growth (15%+ returns)
• Advantage: Institutional-grade infrastructure and expertise
• Challenge: Higher operating costs require substantial assets to justify

As Chew Mun Yew, head of private wealth at UOB, notes: "There are four critical enablers to partner with family offices: expertise with an advisory approach; efficient tech platforms; comprehensive bank propositions beyond just investments; and regional connectivity to serve the multi-jurisdictional nature of families."

The Family Office: Choose Your Setup

First, understand there are three distinct models, each with different costs and control levels:

Single-Family Office (SFO)

Your own private wealth company. Complete control, maximum customisation, but highest cost.

• The setup: A dedicated company you own that employs staff solely focused on your family's wealth and personal affairs.
• The price tag: Typically requires $150M+ to justify costs, with annual expenses around 1-2% of assets under management. That's $1-2M annually on a $100M portfolio.
• The superpower: Full control and privacy – your team reports only to you, and everything is tailored to your needs.

Multi-Family Office (MFO)

Shared resources with other wealthy families. Lower cost, less control.

• The setup: A firm serving multiple families, pooling expert resources across clients.
• The entry point: Many accept clients starting around $30M in net worth.
• The advantage: Cost-effective access to specialists, established infrastructure, broader expertise than you could assemble alone.
• The trade-off: Less customisation and potential conflicts if one client dominates attention.

Virtual Family Office (VFO)

The lean, tech-enabled approach. Maximum flexibility at lower cost.

• The setup: Minimal in-house staff (maybe just one coordinator), most functions outsourced to external providers, and all connected digitally.
• The efficiency play: Pay only for services you actually use, scale up or down as needed.
• The challenge: Requires strong coordination and tech savvy to ensure nothing falls through the cracks.

Think of it as choosing between building your custom gaming PC (SFO), joining a high-end gaming club with shared equipment (MFO), or using cloud gaming with pay-as-you-go services (VFO).

The Cost Factor

Before diving in, let's talk numbers. Family offices aren't cheap.

For an SFO:

• Annual operating costs of 1-2% of assets (sometimes up to 3% for smaller offices)
• A $100M family might spend $1-2M annually
• Covers salaries, office space, technology, and professional services
• Setup costs include legal fees, regulatory work, and hiring expenses

For an MFO:

• Typically charges 0.3-0.7% of assets for investment management
• Plus additional fees for other services
• A $100M family might pay $500K-$700K annually for comprehensive service
• Minimal setup costs – you're joining an existing firm

For a VFO:

• Potentially under 1% of assets annually
• Maybe a few hundred thousand dollars for a sub-$200M family
• Costs scale with the usage of outsourced services
• Low fixed overhead, but requires family involvement in coordination

Remember: The goal is to create a sustainable edge in managing wealth. That means keeping costs proportional to the value you receive.

"You only need to get rich once, but you need to stay wealthy forever."

Spending a few million $ annually on operations might make sense for a $500M+ family office, but at $100-200M, every basis point counts. This is why many tech founders below the $200M threshold lean toward MFOs or VFOs.

Jurisdictional Arbitrage: Where to Base Your Family Office

Where you establish your family office matters tremendously. The proper jurisdiction can provide tax advantages, legal protections, and operational benefits.

For tech founders with global mobility, consider these top jurisdictions:

🇺🇸 United States (Delaware/Florida/Wyoming):

• Pros: Established legal system, strong asset protection trusts, no state income tax in certain states
• Cons: Global taxation for citizens, FATCA reporting, less privacy than offshore options

🇸🇬 Singapore:

• Pros: Tax incentives for family offices.(Section 130/U), political stability, strategic Asia hub, no capital gains tax
• Cons: Expensive to operate, minimum AUM requirements, substance requirements

🇦🇪 United Arab Emirates (Dubai/DIFC):

• Pros: 0% income and capital gains tax, strategic time zone for global operations, growing ecosystem of family offices
• Cons: Relatively new regulatory framework, need for a local sponsor in some cases

🇨🇭 Switzerland:

• Pros: Banking privacy tradition, political stability, excellent wealth management ecosystem
• Cons: High operating costs, tightening transparency laws

🇰🇾 Caribbean (Cayman Islands/BVI):

• Pros: Tax neutrality, privacy, flexibility in structures
• Cons: Reputational considerations, increasing compliance requirements, and less infrastructure

🇬🇧 UK / Channel Islands

• Pros: Tax neutrality, privacy, flexibility in structures
• Cons: Tax changes post-Brexit, higher compliance reporting burden

Many tech founders employ a multi-jurisdictional approach, such as an investment holding company in Singapore, a trust in the Caymans, and an operating office in Dubai or the U.S.

The key is designing a tax-efficient and practical structure for how you live and operate.

The Service Universe: What Does a Family Office Actually Do?

A family office isn't just a fancy term for "wealth management." It's a comprehensive platform that can handle virtually every aspect of your financial and personal affairs.

The core services typically include:

📈 Investment Management & Wealth Planning

→ Designing investment strategy and asset allocation
→ Manager selection or direct investing
→ Due diligence on opportunities
→ Portfolio management and performance reporting
→ Diversification beyond your business/company stock

📊 Tax Planning & Accounting

→ Tax strategy across jurisdictions
→ Setting up tax-efficient structures
→ Bookkeeping and bill payment
→ Annual tax return coordination
→ Multi-jurisdictional tax compliance

⚖️ Legal Affairs & Succession Planning

→ Estate planning (wills, trusts)
→ Entity management (LLCs, trusts, private funds, foundations)
→ Succession planning for wealth transfer
→ Asset protection strategies
→ Cross-border estate issues

🤝 Philanthropy Management

→ Setting up charitable vehicles
→ Crafting giving strategies
→ Handling grantmaking due diligence
→ Monitoring the impact of donations
→ Engaging family in philanthropy

👨‍👩‍👧‍👦 Family Governance & Education

→ Organising family meetings
→ Developing family mission/values
→ Setting up family councils
→ Educating heirs about wealth
→ Navigating family dynamics

🏝️ Lifestyle & Concierge Services

→ Managing properties
→ Overseeing household staff
→ Coordinating travel and security
→ Managing luxury assets
→ Handling day-to-day logistics

🔒 Cybersecurity & Technology Management

→ Securing digital communications
→ Protecting financial data
→ Safeguarding online accounts
→ Managing IT systems
→ Securing cryptocurrency assets

Not every family office provides all these services. The beauty is in the customisation – you can design your family office to focus only on what matters to you.

As a tech founder under $200M, consider starting with Virtal Family Offices and focus initially on the highest-value services: investment diversification, tax planning, and estate structuring. You can add other services as your wealth and needs grow.

The Pros and Cons: Choose Your Game Mode Wisely

Each family office model comes with its trade-offs:

The decision ultimately hinges on the level of control you want versus the costs you're willing to bear.

Top 5 Challenges that Family Offices face

Based on numerous interviews with family offices across the globe, five key challenges emerge:

🏛️ Challenge 1: Weak Governance

Many family offices lack formal decision-making processes and clear guidelines for information sharing. This is particularly problematic for tech founders used to structured corporate governance in their previous companies.

Solution: Implement clear governance structures, transparent communication flows, and defined decision-making processes—even if you're the sole decision-maker today. Document these so your family office can scale as your wealth grows.

💸 Challenge 2: Rising Operational Costs

Personnel costs typically represent 45-65% of operating expenses for family offices. Competition for financial talent is intense, especially against hedge funds and investment banks that can offer higher compensation.

Solution: Consider a hybrid staffing model with core functions in-house and specialised expertise outsourced. Develop clear career paths for your team members, including professional development opportunities beyond compensation.

🔍 Challenge 3: Limited Access to Bespoke Alternative Investments

Many family offices struggle to access tailored alternative investment solutions despite strong interest in pre-IPOs, infrastructure projects, and early-stage startups.

Solution: Build direct connections with venture capital and private equity firms. Leverage your industry expertise and network to gain proprietary deal flow that traditional family offices can't access.

🛡️ Challenge 4: Underutilization of Insurance Solutions

Many family offices, particularly those led by former bankers, don't fully utilise insurance products for wealth transfer and estate planning across multiple jurisdictions.

Solution: Work with specialised insurance advisors who understand insurance solutions' financial and legal implications across different jurisdictions where your assets and family reside.

💻 Challenge 5: Outdated Technology

Many family offices collect vast amounts of data but lack the expertise to consolidate and derive meaningful insights from it.

Solution: Leverage cloud-based solutions for family offices rather than building custom systems. Consider partnering with WealthTechs, specialising in portfolio aggregation, performance analytics, and reporting.

The Provider Landscape: Who Serves Family Offices?

Five broad types of providers have emerged to serve family offices, each with unique advantages:

🏦 Banks with an Integrated Approach

• Offering: Comprehensive services including research, credit products, and investment solutions
• Advantage: One-stop shop with extensive infrastructure
• Cost structure: Management fees (25-50 basis points) plus product fees
• Best for: Families seeking comprehensive banking services alongside wealth management

💼 Banks with à la Carte Approach

• Offering: Focused on specific services rather than end-to-end solutions
• Advantage: More transactional efficiency and potentially lower costs
• Best for: Families with specific financial product needs rather than comprehensive management

🛡️ Insurers

• Offering: Bespoke insurance solutions for wealth transfer and preservation
• Advantage: Highly customised policies underwritten on a case-by-case basis
• Best for: Complex wealth transfer scenarios across multiple generations and jurisdictions

👨‍👩‍👧‍👦 Multi-Family Offices (MFOs)

• Offering: Customised investment strategies with performance-based fee structures
• Advantage: Act as gateways to essential services like custody, tax, and legal advisory
• Best for: Families seeking tailored solutions without building their infrastructure

💻 WealthTechs

• Offering: Technology-driven investment management, often with AI capabilities
• Advantage: Scalable solutions at potentially lower cost
• Best for: Tech-savvy families comfortable with digital-first approaches

Alternative Approaches for Wealth Management

Not ready for a full-on family office? Consider these alternatives that provide many of the same benefits:

1. Private Banks with Family Office Services: Major banks like UBS, Credit Suisse, and Goldman Sachs offer specialised services for ultra-high-net-worth clients, essentially functioning as de facto family CFOs.
2. Fractional Chief Investment Officer (CIO): Hire a firm to handle your investments as a bespoke mandate while keeping other financial needs separate.
3. External Trust or Fiduciary Companies: Use established trust companies (in Delaware, South Dakota, etc.) to handle the fiduciary aspects without creating your own structures.
4. Family Office Platforms: New "family office as a service" offerings provide consolidated reporting and access to vetted providers without building from scratch.
5. Personal CFO Approach: Hire one capable finance professional who coordinates everything externally and is your single point of contact.

These alternatives can be stepping stones toward a more formalised family office as your wealth grows, or they might be sufficient as permanent solutions if simplicity is a priority.

Critical Success Factors: The Cheat Codes for Family Office Success

To run an effective family office under $200M, focus on these factors:

Cost Management

Target operating costs around 1% of assets or less. Start small with core services, scale gradually, and leverage technology aggressively to avoid overstaffing. Regularly review expenses against value delivered.

Privacy & Security

Make cybersecurity your top operational priority. Use encrypted communications, secure file sharing, and regular security audits. Many family offices now see cybersecurity as their #1 risk – don't be the exception.

Succession Planning

Even first-generation wealth needs a transition strategy. Document key information in a family office "playbook" so knowledge isn't lost. If applicable, gradually involve the next generation. Ask the tough question: Who will oversee this when you're not around?

Investment Governance

Establish an Investment Policy Statement (IPS) that clearly outlines:

• Target asset allocation
• Liquidity needs
• Risk tolerance
• Performance benchmarks
• Decision-making process

For tech founders, this often means balancing the desire to stay in the innovation game (through venture investing) with the need for diversification and capital preservation.

Tax Efficiency & Legal Structure

Structure your family office and assets to minimise tax drag. Consider:

• Should your family office be a cost center or profit center?
• Which entity types offer the best liability protection?
• How will cross-border investments be structured to avoid double taxation?

Digital Transformation

Leverage technology to operate at a fraction of traditional costs:

• Portfolio aggregation and reporting tools
• Secure collaboration platforms
• Automated bill pay and accounting
• Digital document management
• AI-powered analytics for investments

As a tech founder, this should be your natural advantage – apply the same digital transformation principles to the wealth that you used in your business.

Useful Resources for Building a Family Office Under $200M

Best Practices: Level Up Your Family Office Game

Finally, here are the strategies that distinguish truly effective modern family offices:

1. Start with a Clear Mission → Define what your family office exists to achieve. Is it wealth preservation? Legacy building? Impact investing? This mission will guide all decisions.
2. Build a Lean Hub with Strong Network → Keep your core team minimal but maintain relationships with top specialists you can call upon as needed. This "hub and spoke" model offers flexibility without bloat.
3. Implement Strong Governance → Establish clear procedures and policies, even with a small team. Regular review meetings, documented decisions, and clear roles prevent costly mistakes.
4. Embrace Digital-First Operations → Go paperless, use secure cloud solutions, and automate routine tasks. Treat your family office like a lean, digital, and scalable fintech startup.
5. Focus on Transparency Within the Family → Create simple dashboards or reports for family members to stay informed. This builds trust and helps educate the next generation about wealth.
6. Design for Adaptability → Structure your family office to scale up or down as needs change. Avoid rigid long-term arrangements that limit flexibility.
7. Join Peer Networks → Connect with other family offices to share best practices and co-investment opportunities. This counters the isolation that can come with private wealth management.
8. Conduct Periodic Strategic Reviews → Every 2-3 years, reassess your entire approach. Is your chosen model still optimal? Are your service providers delivering value? Has your wealth level changed significantly?

Final Thoughts: Playing Your Own

Remember that a family office isn't an end – it's a tool to serve your goals and values. The most successful family offices reflect the unique priorities of their founders.

For tech entrepreneurs, that might mean:

• Maintaining a portion of capital for angel investments or venture funds
• Implementing a digital-first, lean approach to operations
• Building in flexibility for global mobility
• Creating structures that balance wealth preservation with continued innovation

Historically, old money and traditional approaches have dominated the family office world. As a tech founder, you can reinvent this model, making it more efficient, transparent, and aligned with modern wealth creation.

Survive first. Thrive later.

Whether you choose an SFO, MFO, VFO, or a hybrid approach, the key is designing a system that provides the necessary control without consuming the wealth you've worked so hard to build.