Ask whether family offices do their startup investing directly or through venture funds and you are really asking two questions: what offices actually do, and why the answer keeps changing. On the first, the most credible evidence is unusually clear. The UBS Global Family Office Report 2026 finds that, within private markets, direct positions and fund commitments now sit at rough parity, after several years in which the balance tilted towards direct.
This piece sets out the numbers worth trusting, the reasons an office picks one route over the other, where each route concentrates risk, and the co-investment middle path most offices end up on in practice. It is written for principals and CIOs, and for the operator-angels who share cap tables with them.
The Carry's reading of the UBS survey data: the direct-versus-fund question has stopped being a conviction contest. Since the direct-heavy tilt of 2021 the split has drifted to rough parity, and what decides it now is team capacity, fees and access, not fashion.
The interesting question is not which route is winning. It is why the balance keeps moving.
What percentage of family offices invest directly in startups?
There is no single reliable percentage, and the best-evidenced answer is parity: within the average family office's private-markets allocation, direct positions and fund commitments now sit at roughly even weights, according to the UBS Global Family Office Report 2026, which surveyed 307 family offices with an average of around $1.3bn under management. That is a change of direction. In 2021 the balance skewed direct, with direct positions at roughly 13% of the average portfolio against around 8% in funds.
For context, the same UBS report puts alternatives at about 42% of the average portfolio, while Campden Wealth research puts private markets at around 29% of the average family-office portfolio in its 2025 reporting. The two figures measure different samples with different definitions, which is exactly why headline numbers in this area disagree.
One caution. Aggregator sites circulate suspiciously precise claims that a large majority of family offices invest directly. Those figures do not trace back to a named primary survey. When a percentage arrives without a source attached, discount it.
Why do family offices invest directly rather than through funds?
Three things pull an office towards direct deals: control, cost and proximity. A direct position gives the office the terms it negotiates, the information rights it insists on, and an exit stance it sets itself, with no fund clock forcing a sale. Family capital can be genuinely patient in a way a ten-year fund cannot.
Cost is the second pull. A direct cheque carries no management fee and no carried interest, so every pound reaches the company. The third is proximity: many offices sit on operating fortunes, and principals often want to stay close to founders in sectors they know first-hand. In the UK there is a further wrinkle: where individual family members subscribe for shares personally, SEIS and EIS relief can enter the picture, though the office as an entity cannot claim it. The eligibility rules are covered in who can actually claim SEIS or EIS relief.
The price of all this is concentration and workload. A direct book means risk gathered in a handful of names, and someone has to source, price, monitor and fund the follow-ons. Offices without dedicated people tend to discover how much work that is only after the money is in.
Why do family offices still commit to venture funds?
Because assembling early-stage diversification one deal at a time is slow, expensive and hard, and a fund commitment buys it in a single decision. A fund brings a portfolio spread across dozens of companies, pacing across vintages, access to deal flow the office would rarely see on its own, and a disciplined reserves policy for follow-ons.
Diversification matters more at this stage of investing than almost any other, because returns are savagely skewed: most positions return little or nothing and one or two winners end up paying for the whole portfolio. A small direct book faces long odds of holding the outlier. A fund's breadth shortens them.
This is also the honest answer to the question of whether family offices are replacing venture capital. Parity in the UBS data reads as complement, not replacement: offices use funds for coverage and pacing, then go direct or co-invest where they believe they have an edge. What funds cost is well known, management fees, carried interest, ceded control and liquidity on the fund's schedule rather than the family's.
Where does co-investment fit between the two routes?
For most offices the practical answer to direct versus funds is both, joined by co-investment: Campden Wealth research consistently finds that co-investments and club deals are the dominant structure for family-office direct activity. The office invests alongside a fund manager, through LP co-invest rights, or alongside an experienced angel lead, either straight onto the cap table or through an SPV or nominee.
The appeal is deal-level choice without building the full sourcing machine, and a lighter fee load than a blind-pool commitment. What it does not remove is dependence on the lead's judgement, or the diligence the office still owes on every deal it joins. The table above puts the three routes side by side.
The mechanics of the club deal from both sides of the table are covered in how family offices co-invest with angels and VCs. And the parallel question angels run for themselves, holding shares directly versus through an SPV, is compared in the direct versus SPV comparison.
How should a family office decide between direct deals and funds?
It depends, and the variables are knowable. The offices that get this right tend to weigh five things honestly before committing to a route:
- Team capacity. A direct programme needs people who can source, price and monitor deals as a job, not a sideline. Without them, the office inherits the workload anyway.
- Deal access. Direct returns depend on seeing good companies early. An office without proprietary flow tends to be shown what better-connected investors passed on.
- Fee tolerance versus control. Fund fees are certain; the value of control is situational. Which one the family actually prizes decides more than any spreadsheet.
- Diversification maths. How many early-stage positions can the office realistically hold and follow? If the honest answer is a handful, the concentration risk is the strategy.
- Horizon and liquidity. Patient capital is a real advantage in direct deals; a fund distributes on its own timetable, not the family's.
A closing note on what this article is and is not. It is general information about how family offices approach a choice, not financial advice and not a recommendation of any route. Tax treatment in particular turns on the office's structure and on who subscribes for the shares: confirm the current position in the venture capital schemes guidance on GOV.UK and take advice from an FCA-regulated adviser before committing capital.
Frequently asked questions
What percentage of family offices invest directly in startups?
There is no reliable single figure. The UBS Global Family Office Report 2026, which surveyed 307 family offices with an average of around $1.3bn under management, finds direct positions and fund commitments at rough parity within private markets, after a 2021 cycle in which direct positions were roughly 13% of the average portfolio against about 8% in funds. Precise-sounding percentages that circulate on aggregator sites do not trace back to a named primary survey, so treat them with caution.
Are family offices replacing venture capital funds?
No. The balance has shifted rather than flipped. UBS's 2026 data shows direct and fund positions at rough parity, which points to the two routes being used together rather than one displacing the other. In practice many offices commit to funds for coverage and pacing, then invest directly or co-invest in the specific situations where they believe they have an edge.
Why do family offices like direct startup investments?
Control, cost and proximity. A direct position carries no management fee or carried interest, the office negotiates its own terms and information rights, and family capital can hold for as long as it chooses rather than on a fund's timetable. The trade-offs are concentrated risk in a small number of companies and a heavy workload of sourcing, diligence and monitoring that has to be staffed.
Can a family office claim SEIS or EIS relief on direct startup investments?
Not as an entity. Under the GOV.UK venture capital scheme rules, SEIS and EIS income tax relief is available only to individual investors, so a company or a standard trust structure cannot claim it. Family members who subscribe for shares personally can qualify, and an individual subscribing through a nominee is treated as the subscriber. The detail is unforgiving, so it belongs with a tax adviser.
Which route should a family office choose?
There is no general answer, and this article is general information rather than financial advice. The decision turns on team capacity, deal access, appetite for concentrated risk, fee tolerance and time horizon, and the credible data suggests most offices end up blending routes rather than picking one. Confirm the current rules on GOV.UK and take advice from an FCA-regulated adviser before committing capital.