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Family Offices Have a Unique Capacity for Revitalizing our Economy through Creative Disruption

Charles Stucke

01-16-2025

In a recent Daniels Insights post, we explored how entrepreneurs should view partnerships with wealthy families.

A short recap: Venture capital — the private sponsorship of technological and commercial innovation — has for centuries been a driving force for social progress, prosperity, productive disruption, capitalism, freedom, liberal democracy and more. When we think about venture capital, we often think of famous, entrenched firms. Yet, family offices play a critical and often under-appreciated role in the venture ecosystem. Their role serves an important enabling and enfranchising function within our nation’s capitalist economic model — family offices across the U.S. quietly back the ideas of tomorrow. Entrepreneurs should seek partnerships with families whose business objectives, goals, and values align well with their ambitions.

A family office is a private wealth management advisory firm that serves high net-worth individuals, including entrepreneurs. Historically, some of venture capital’s most impactful successes took root when wealthy families helped scientists and engineers drive great ideas from prospect to reality as early-stage, strategic partners.

When family offices invest in early-stage ventures, they exercise core free-market muscles and deliver the commercial rewards of our freedom. More can be done to promote and increase family offices’ impact. To do so, we in the academy should:

Promote the role of family offices in creative disruption

Using narrative, forum, and research to highlight the role family offices play in driving innovation and economic dynamism can attract more family office investors who value being agents of societal and free-market progress.

Educate family offices on their impact

Family offices should be made aware of their pivotal role in sustaining capitalism and fostering this meritocratic ladder of opportunity. They should have the opportunity to participate in enabling research, thereby further motivating them to increase their venture funding activities.

Incorporate family offices into broader venture capital policy discussions

Investors, researchers, and policymakers should ensure family offices are part of discussions about fostering innovation ecosystems, recognizing their unique capacity for risk-taking and nurturing disruptive ideas.

The breadth and depth of family-sponsored venture funding activities make the U.S. one of the most creatively productive nations on earth. Yet, this is an under-appreciated area ripe with opportunity. New family-backed ventures innovate and compete. They force existing powers to change in response to social needs through the process of creative destruction. Joseph Schumpeter would be proud of our innovators and their family office sponsors. Their endeavors act as a bulwark against entrenchment and extend a relatively meritocratic ladder of opportunity to the ambitious. Our winners move us all forward.

The dynamism of our businesses and markets rests in large part on the risk-taking of these family office investors, not just that of established and important venture capital firms. This dynamism creates the very prosperity that validates our free-market model. It helps preserve the precious freedoms we take for granted. It also gives us the excitement and hope of progress. More, please.

Charles Stucke, CFA, retired as the Chief Executive Officer of Lepercq de Neuflize Asset Management LLC in 2019. He serves as a Business Fellow in Global Family Office and Wealth Management at Purdue University’s Mitch Daniels School of Business, as an adjunct lecturer on the faculty of Washington University in St. Louis, and on the board of trustees of The Wilson School.