Why family offices evaluate funds differently from institutions
Family offices are not institutional LPs. They don't have the same governance structures, committee approval timelines, or mandate constraints as university endowments, pension funds, or sovereign wealth funds. A single-family office CIO can often make a fund commitment decision in a single meeting if the fit is right.
This is their greatest appeal as an LP — but it also means their evaluation framework is more personal and less formulaic than you might expect. Family offices are evaluating the manager as much as the fund. They're asking: do I want to be in a 10-year relationship with this GP? Can they execute on this thesis? Do they have genuine edge?
That said, there are six consistent criteria that appear across nearly every family office diligence process. Understanding them lets you position your fund correctly before the first meeting.
The 6 criteria family offices apply to PE and VC funds
Manager track record — DPI, TVPI, attribution
The most scrutinised criterion. Family offices want to see DPI (distributed capital as a multiple of paid-in capital) above 1.0x on prior funds — they distinguish between realised returns and paper gains. TVPI is considered alongside DPI; a high TVPI with zero DPI raises questions. For emerging managers without a prior fund, deal-by-deal attribution from carry or co-investment positions can substitute — but you'll need verifiable documentation (cap table entries, distribution notices) not just a performance summary. SFOs are more willing to accept attribution-only track records than MFOs.
Most important criterionFund size alignment with check capacity
A family office wants to own a meaningful percentage of your fund — typically 1–5%. If their target check is $500K and your fund is $200M, they represent 0.25% — too small to get allocation treatment or co-investment rights. If their check is $500K and your fund is $10M, they represent 5% — potentially at concentration limits for their alternatives portfolio. The sweet spot: a $500K LP in a $20M–$50M fund (1–2.5%). Match your fund size range to the check capacity of your target LP universe before outreach. Altura Data's family office database includes AUM range per contact so you can filter by check size capacity.
Filter first, pitch secondSector, stage, and geography fit
Family offices have investment mandates. Some only back seed-stage funds; others only growth or buyout. Some have sector constraints — a family office built from a healthcare exit may exclusively fund healthcare. Some are geographically restricted (home-market only) while others explicitly seek cross-border exposure. A mismatched mandate is the most common reason a family office declines a pitch — and it's entirely avoidable with upfront research. Before reaching out, confirm that the family office has backed funds at your stage and in your sector. Competitors like FINTRX and Preqin offer mandate filters, as does Altura Data's database.
Qualify before outreachGP co-investment — skin in the game
Family offices universally look for GP commitment — the amount the manager personally invests in the fund alongside LPs. The typical expectation is 1–3% of fund size from the GP. A $30M fund should have $300K–$900K in GP commitment. This signals conviction: a GP who has put their own wealth into the fund has every incentive to maximise returns rather than collect management fees. Single-family offices, who are often investing their own family's wealth, are particularly attuned to this. A GP with zero personal commitment is a yellow flag regardless of track record.
Standard expectationFee structure — management fee and carry
Standard VC fund terms (2/20 — 2% management fee, 20% carry) are broadly accepted. Family offices become concerned at management fees above 2.5% (disproportionate to fund size at small fund sizes), carry above 25%, or unusual hurdle rates. They also evaluate fee-on-fee exposure — if your fund invests in other funds, the family office may be paying two layers of fees. For emerging managers, some family offices negotiate preferred economics in exchange for anchor LP commitments — this is worth exploring if a family office wants to write a large check on your first close.
Negotiate at first closeReporting and LP access standards
Family offices expect quarterly capital account statements, annual audited financials, and portfolio company updates at a minimum. Multi-family offices often require ILPA-standard reporting templates. Some ask for direct co-investment rights (the right to invest directly in portfolio companies alongside the fund) — a significant commitment for a manager but a meaningful value-add from the LP's perspective. Key metrics they track every quarter: NAV, DPI, TVPI, RVPI, and unrealised portfolio company status. A fund that can't produce clean quarterly reports is a governance risk, not just an operational one.
ILPA standard preferredThe practical implication: most first-time managers fail to qualify family offices before outreach — they send a broad pitch to every family office they can find, regardless of mandate or check size fit. A curated list of 50 family offices who match on all six criteria converts at 10–20× the rate of an unqualified list of 500.
How SFOs and MFOs differ in their criteria
Single-family offices — faster, more flexible
One principal decision-maker means no investment committee process for most commitments. SFOs can move from first call to term sheet in 4–8 weeks. They're more willing to back first-time managers (especially with warm introductions from portfolio companies they already back), more flexible on fund terms, and more open to emerging markets or novel thesis. The downside: AUM is typically lower ($50M–$500M), limiting check size. Our family office database includes 2,800+ single-family offices across 60 countries.
Multi-family offices — more institutional, more capital
MFOs have formal investment committee processes and allocate capital across multiple client families. They move more slowly (3–6 months) and require more documentation — audited financials, formal track record verification, legal due diligence. But a single MFO can often write a larger check than an SFO, and they may bring multiple families to a single fund, effectively aggregating LP capital from their network. MFOs are most accessible after you have 1–2 funds with some distribution history.
What to prepare for family office due diligence
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