By Steven Thayer, Partner, Ice Miller
For business owners seeking capital to grow, the search often leads to private equity funds or institutional investors. But an increasingly powerful and often overlooked source of patient, long-term capital is the family office. These private investment vehicles, created to manage generational wealth, are now sophisticated direct investors with a strategic interest in privately held businesses.
Family offices provide something institutional funds often cannot: flexibility, long horizons, and the ability to deploy additional capital over time. For many business owners, this makes family offices ideal partners for long-term expansion, acquisitions, or generational transitions.
The Capital Gap and the Opportunity for Business Owners
More than 33 million United States businesses compete for a limited supply of public and private capital, with only a small fraction securing funding from private equity. The decline in the number of public companies further limits access to public capital. Private investors, including family offices, can help fill the funding cap by providing not just money, but alignment, expertise, perspective, and continuity.
Why Family Offices Are Different: The Power of Patient Capital
- No Fund Life = Long-Term Alignment
Unlike private equity funds that must return capital within a specific fund cycle, family offices invest their own capital with no forced exit timeline. This allows businesses to grow at a sustainable pace, weather downturns with supportive investors, and pursue strategic opportunities without artificial timing constraints.
- Ability to Write Additional Checks
When businesses need follow-on funding, whether to support rapid expansion, pursue a bolt-on acquisition, or navigate a temporary cash crunch, a family office can often deploy additional capital quickly. By contrast, private equity funds may be closed, overallocated, or constrained by internal reserve policies.
- Values and Culture Matter
Many family offices prioritize legacy preservation, continuity, sustainable leverage, and partnership-driven decision-making. This mindset aligns closely with founders and multigenerational business owners.
Approaching Family Offices in a Legally Compliant but Relationship-Driven Manner
Business owners must balance discreet, relationship-centered outreach with strict compliance under federal securities laws—particularly Regulation D and anti-fraud disclosure obligations.
- Use Regulation D Correctly
Most investments from family offices occur under Rule 506(b) of Regulation D, which permits private offerings without general solicitation. Family offices prefer this approach because it fits their expectation of confidentiality and exclusivity.
- Provide Material Disclosures Without a Formal Private Placement Memorandum
While accredited-only offerings do not require a private placement memorandum, anti-fraud rules still require full and fair disclosure of all material information. Business owners should provide financials, risk disclosures, cap tables, and key documents, whether informally or through a bespoke diligence process.
- Discreet Outreach Is Permitted Under Rule 506(b)
Outreach to a small group of known family offices is permissible and consistent with both the law and family office expectations. Avoid broad solicitations, websites, social media announcements, or mass emails. If general solicitation is necessary, consider using Rule 506(c) as a fallback exemption and gather the additional information that is otherwise required to verify accredited investor status.
- Balancing Exclusivity and Negotiation
Family offices want the sense of receiving an early, special look, and don’t like to participate in auctions. Business owners, however, want competitive terms so that they can find the best deal. A controlled, staggered outreach to a curated group helps preserve compliance while protecting deal dynamics. Focus on finding the right partner first and negotiating the best deal second. If the best partner doesn’t give you the best deal, perhaps they are not the best partner. As long as you plan to raise capital well in advance of the date that you actually need it, you will have plenty of time to get the right partner and negotiate the best deal.
Conclusion
Family offices provide patient, flexible capital that can transform a growing business. They offer long-term alignment, follow-on investment capacity, and a partnership mindset rarely found in traditional funds. By approaching family offices discreetly and in compliance with Regulation D, business owners can build durable, mutually beneficial relationships that support growth for years to come.
For questions, please reach out to a member of Ice Miller’s Business team.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.