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Life Cycle of the Family Office: Pre-Wealth

November 14th, 2022 by admin

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Starting a Family Office is still an area unknown to most. In this Blog series, we will break down our Life Cycle of the Family Office with case studies covering real-life examples of each stage of the life cycle.

Most families in the Pre-Wealth stage have founded a business or work for one that has not gone through a liquidity event yet. The majority of the wealth of these families is typically still on paper with small amounts in a liquid form. Pre-Wealth families still spend lots of their time working on their businesses to increase their value while often thinking about how much easier things will become after their liquidity event.

Case Study

Our first case study takes a look at the Principal, who is a single man valued at several hundred million dollars, is in his early 30's, and is running a tech start-up that he founded. The Principal is actively working and is interested in setting up structures and systems, including security, in advance of an IPO/Wealth event and the purchasing of a home. At the time EFO was hired, everything was being managed through his Executive Assistant at his company with some advice from his tax firm.

What Seems to be the Issue?

This Principal faced significant privacy and security issues due to the nature of his company's business. In addition, he is in need of personal organization, including assistance managing his household and overseeing Bill Pay. At the time of this study, there were not any personal full-time employees. In addition to the lack of full-time staff, the Principal had no Accounting, Security, IT, or physical family office in place.

How Were These Problems Solved?

EFO performed a thorough audit and assessment of the current (and lack of current) systems and Family Office staff. We helped guide the design and execution of an estate plan, including a transition to a new estate attorney with a stronger UHNW skill set. Our team also implemented a scalable LLC structure for asset holdings and anonymity. Part of the structure that was set up included weekly meetings to determine needs and advice, and provide resources & referrals, which proved to be extremely helpful. EFO provided short-term outsourced Family Office services including concierge level personal assistance, a move from San Francisco to Los Angeles, and his first home purchase from search to offer to closing. We assisted in ongoing guidance and recommendations for best practices and integration. Lastly, EFO helped interview and onboard a Bookkeeper, Owner's Representative for house renovations, and introduced the Principal to new investment managers, IT, Security, and law firms. Through the help of EFO, the Principal successfully completed his short term goals while still becoming comfortable in his new wealth.

Can you relate to this story? We'd love to hear your experience and how you managed the process. Do you believe there was an aspect we missed in our assessment or solution? If so, please share your comments or observations. We welcome your insights.

Posted in: Lifecycle of the Family Office

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