Video: Family Office Technology Panel

MyFoTech has posted the recording from the My Family Office Tech & Ops Conference November 2023, from my panel with:

  • Raymond DiNunzio, TOS Advisors, an expert in technology for family offices
  • Hugh Nguyen, formerly Chief Executive Officer of ClearServe℠, a leading technology platform for Family Offices and other wealth managers
  • Michael Sikorsky, CEO of Copia Wealth Studios, Emeritus CEO of Robots & Pencils, manager of a single family office
  • Christine Chang, formerly CEO, 6th Avenue Capital

and a keynote by Jamie McLaughlin, a prominent wealth management and family office consultant.

Register for free here to view the full recording.

Here’s a clip, and below is a summary of the panel.


Our panel of investors, technology entrepreneurs, and board advisors discusses examples and the driving forces behind the latest trends in technology investing. What does the future hold for this sector? How can investors efficiently manage their pipeline, best source and evaluate the most compelling opportunities? What are red flags to look for?

Panelist backgrounds

David Teten has a long history of building investment management firms and deep expertise as both an investor and a user of investment tech to enhance the growth of firms he’s been involved with. Through his various roles as a VC, partner at a VC accelerator and his PE/VC network, David’s focus is on helping investors in the private markets generate alpha.

Hugh Nguyen’s background includes founding a software company for RIAs and family offices, later sold to an asset manager. He now runs a venture-focused investment firm with a hybrid single family office model, primarily investing in financial technology, AI, digital media, ESG, and climate tech. Check sizes range from $100k to $2 million, syndicating larger investments through their co-investment Network.

Michael Sikorsky is a tech entrepreneur with his own family office set up following successful exits. Michael invests mainly in technology, but he also diversifies across sectors, with check sizes ranging from ranging from $50k to $5 million. He’s also the creator of Copia, which is on a mission to be the omni platform for the ultra high net worth.

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Ray DiNunzio’s TOS Advisors works with several emerging family office technologies, helping them “stand up” and integrating them into their digital family office platform as well as offering broader support and network access.

The discussion was moderated by Christine Chang, whose experience serving family offices spans generations, geographies and industries, with roles including introducing co-investment partners and leading operating companies as Board Chairman, CEO, COO and CCO. She leads senior management teams to build operational and regulatory infrastructure & technology, and navigate special situations.


What is the current macro view of investing in technology?

Capital raising for operators and portfolio companies has been challenging in the past 18 to 24 months. Many investors are just sitting on capital. VCs that traditionally had not led deals have had to step up and co-lead rounds for their portfolio firms. But, as the saying goes, when there is blood in the street, it’s time to buy… FinTech valuations have been slashed by 50 to 70% creating a buying opportunity on the investment side to come in at an earlier stage. Traditionally late-stage investors, including growth equity or later-stage private equity funds, are jumping into early-stage. There are also firms raising money for distressed venture, buying up valuable assets that can be retooled.


What about Artificial Intelligence? 

It is definitely THE hot button issue of the moment. Everybody likes talking about it, but the investment arena is more nuanced. A considerable portion of capital is being absorbed by a few major players that are essentially underwritten by large tech giants, leaving other emerging tech companies in a more competitive space. Many investors are trying to figure out where the investment opportunities are, for example which apps might be acquisitive targets for some of the larger players. There is a lack of understanding of what’s really going on in generative AI, largely because of the mind-blowing pace and volume of advancements in recent months. As a result, many take a ‘wait and see’ attitude.

However, the potential for small teams to achieve significant outcomes and speed up the innovation cycle leveraging AI, even with minimal headcount, is certainly being recognised. Many family office tech firms are incorporating AI into their systems, such as for helping draft legal docs or deal sourcing for private equity funds through highly personalized emails.


Where are we going to see most innovation in technology addressing the pain points of family offices?

Ray expects major changes in the next 24 months in alternative investments, particularly in how underwriting and subscription documents are handled. The focus has shifted from creating unnecessary marketplaces to rethinking the operational workflow, which is ripe for a major change. Through blockchain and smart contracts the paperwork can be eliminated and transactions streamlined. The prediction is bold: feeder funds will become obsolete soon, signaling a significant shift in the investment landscape.

Another major pain point is data hygiene and data reconciliation as multiple systems are integrated into a tech stack and the complexity of family office operations goes up.


What is your specific investment process?

Deal sourcing: As always, investors are seeking asymmetric information edges, often through co-investment with specialized VC funds. There’s also a preference for scarce investment opportunities with preferential access like exclusive invites through personal networks. For David, origination and cutting the time spent on deals that don’t pan out are key. He focuses on niche content such as his unique investment tech stack blog and speaking at conferences (like this one!) to reel in emerging VC managers who see the relevance of his accelerator and, in effect, self-qualify.

Due diligence: Hugh describes the two-tiered process for investment due diligence at his firm. Initially, a team member vets entrepreneurs, checking if they align with their criteria and putting successful candidates through a comprehensive information gathering and review involving customer calls and document analysis. The second tier involves compiling this information into an internal investment committee memorandum for partnership review. It is a deliberate process with failure points for the entrepreneur to fail, where the time is on the investment side. If a red flag comes up at the 11th hour, you have to have the discipline to kill the deal.

Red Flags: Lack of market understanding; Creating technology for its own sake rather than to solve an actual problem/need; Unrealistic addressable market figures without a clear link to product/service; Inaccurate technical language and misuse of terms by technologists; Strongly held opinions indicating an unwillingness to pivot based on new input.

Decision journal: Michael says it is probably the most important piece of his investment process. Documenting and regularly reviewing reasons behind investment choices is an accountability check and a way to learn from past investments for future deals.


What non-financial perks do you secure around your investment? 

Hugh’s company adopted a strategy inspired by family offices, securing LP allocations to GPs for co-investment capacity. When structuring SPVs for larger positions, they capture early-stage co-investment opportunities, channeling these to their network for future rounds. In response to the current economic climate, they’ve structured more protective positions with liquidation preferences and downside protection in their term sheets.

Family office technologies mentioned: AddeparArchBrassica FinanceCopia Wealth StudiosIownitAumni (acquired by JP Morgan), ORCAOtto.

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