How to Get Family Offices as Investors

John Livesay Interviews Katherine Hill Ritchie

Hi, welcome to The Successful Pitch podcast. Today’s guest is Katherine Hill Ritchie. She’s the CEO of Pex Global. She’s also part of an organization called 100 Women in Hedge Funds. She has over 20 years of business operational experience and 13 years of investment experience with family offices, private equity hedge funds, due diligence, and all kinds of great stuff that the readers of The Successful Pitch will love to know. Katherine, welcome to the show.

Thank you! I’m glad to be here.

You know, one of the things that’s in your bio among many is that you were listed in 100 Women in Hedge Funds. So, we definitely want to talk about that. But, if you wouldn’t mind, would you take us back to how you got interested in hedge funds and all that, family offices, in the first place? How did that take you to Switzerland?

When I graduated from University of Maryland, my undergraduate degree, I wasn’t quite sure what I wanted to do. I knew graduate school was in my horizon, but not sure exactly how. I was interested in health and fitness actually, and real estate. So, I started my own businesses. I was totally naïve, and when you’re young, you think ‘business plan, what’s that?’


‘Statement, what are you talking about?’ I just started out totally confident in myself. Luckily, I succeeded and I actually made some money, and I started investing also in the stock market. I thought, ‘whoa! Not only can I work hard and make money at businesses, but money can make money for itself.’ Meaning, while I’m at work all day working, my money can be investing. Luckily, at that point this was the late 90s, and so I invested in a lot of tech stocks and I thought I was a genius.


Because, I did well, and I thought, ‘boy, you know what? There’s something to this! Why don’t I go get an MBA?’ So, I sold some of my positions at a very great time as well, at the top. I was able to pay for some of my graduate school that way.

How wonderful.

I moved up to New York City, and I went to Fordham, and that’s where I really learned about portfolio management, entrepreneurship, and it scared the heck out of me, starting a business. I thought, ‘oh my gosh, look at all these things I didn’t even think about!’
So, you know education is very important, but at the same time, it really cautioned me and I thought, ‘I better think about this before I start another business.’ So, I ended up interning at a private wealth management firm and that’s where I learned about what a family office is. What’s a hedge fund? Private equity funds, what is all that? Because I knew public market, stocks, bonds.
Things that a normal retail investor could invest in. So, when I understood more about alternative investments, then I got really excited and interested. What’s a family office? That was a new term for me, and so, what is a family office? So that’s usually a wealthy family - there’s not a cut-and-dry cut-off of how much money they have to become a family office, but it’s usually when they’re large enough to hire their own internal people, investment professionals, to help them allocate capital, keep track of investments, look for new ones. So I thought, ‘oh, that’s pretty cool. I’m interested in that.’ Hedge funds and private equity funds were interesting to a lot of families because some families are a little more passive investors and would like someone else to manage the money for them.
While some others are more interested in direct deals, direct start-ups. So, that helps bring me to what I’m doing today as well. But, over the course of time, I was hired and now I’ve been fortunate to work for 3 billionaire families, and in that time, I was recruited to move to Switzerland. I lived in Geneva for 7 years. What’s great about that network is you kind of meet other families and get invited to very interesting events. You’re able to network with other families. Now, sometimes these aren’t the family members. It could be other employees like me; we’re considered gate keepers.
So, we might be sent out into the world to go to conferences and source deals for these families. Over time, what I learned is that there are families interested in funds. There are families interested in maybe just industry - oil and gas, for example. Or, there’s families that are interested in start-ups. So, they’re a unique investor base because a lot of times, the capital can be flexible. If you go to a VC fund for example, or sometimes Angel, they’re quite strict in what they invest in. They have a limit in the amount of money, or the industry, or the type. It could be, “I only do software”, or “I only do xyz”. So, each family is unique, but they can be very flexible. So, it could be a great source of capital for people who are looking for funding for their companies.

Wow, that’s so great. I love the comparison, because yes, many of the investors I’ve had on the show, whether they’re Angel investors or VCs, are very specific sometimes. They’re like, “we invest between 250 and 500, and we need to be at the beginning, and we only want sass companies.” Or, “we only want high tech.”

Then VCs, will be like, “well, until you’ve gotten this much from seeds, we’re not interested until we get to series A or series B, and we start at 3 million,” or what have you. “We specialize in mobile,” or whatever it is, and “if you’re not in that specific niche, then don’t even bother coming to talk to us.”

Whereas a family is, as you said, much more flexible in both the industry and the amount. If they really love you, and love the idea, and think it has a lot of potential, I’m sure they don’t have those rules to follow, which is great.

Exactly. Now, I would say this. It’s about relationships.

Of course.

You need to get to know them and you might end up spending time having a tea with them, a coffee with them, dinner with them. But then, they’re more likely to be flexible in their investment size, terms, and it could be a great person on your advisory board to introduce you to other families because the minute I say “family office,” people really perk up.
“Oh! I’m interested!” Family offices want to meet other family offices, and know what they’re doing. So, it can be a great; you break in and you meet one. You can say, “it would be great to be a part of your network.”


Also, there are conferences and events geared towards families. So, those can be very exclusive. But, if you’re able to get an invitation, or a lot of times, they look for sponsors, it would be great for someone to pitch at those events. Again, they can be pretty strict. You know, they vet who’s coming in.

Of course.

But, if you get those kind of invitations, that can be very useful. Or, work with someone who has a background with family offices who can kind of really help with introductions and craft your pitch to a family. Families like to hear a story. You know, sometimes people pitching their company are so used to VCs or The Shark Tank-like, “what’s your evaluation? How much are you looking for?”
When a family want to might say, “tell me the story. How did you get this idea?”


So, I think you want to craft your message a little bit differently for that crowd, and also your presentation materials. They need to be really institutional quality, top shelf. Families will invest in start-ups and seed, but they want a presentation.

Of course.

They want institutional quality looking materials.

Right, because they live a life of luxury. They’re used to certain standards, and they want everything to match that standard.

Exactly. So, even if people do get funding off writing an idea on a napkin, although I wouldn’t recommend that, I would say, “be prepared, be professional, look sharp.” You know, don’t go in jeans and a hoodie.
But, you may have a real life-long friend if you get to know some of these families. Also, which is very good point, a lot of private equity, VC Angels, they’re banking on an exit from you. There are families who think, “oh! You don’t need to sell. You don’t need to go public. If you’re generating revenue and I’m getting a revenue share, that’s great! Keep it that way!” They don’t have shareholders to answer to. They may have other family members to answer to. But, it’s not the same time horizon.

Got it.

So, that can be very useful for entrepreneurs who are trying to raise capital is that you don’t necessarily have that same pressure.

I love it. Also, you can still get money from Angels and VCs and say that part of your exit strategy is to get a billionaire or family office family to buy you out; because you’ve already got traction and proof of concept, and all that good stuff.

Yes, yes. I think it does help though if you have Angel or VC money when you’re going to a family because they do like if somebody else has been there first.

Yeah, adventured a little bit.

They do like that as well.

Yes, yes.

That always helps.

Do you look at any graduates of accelerators? Like Y Combinator, or there’s one in upstate New York called StartFast. Is that also a nice credential for families?

You know, it’s interesting you say that because I was just talking to a family and they specifically said that they really focus on anyone who’s been through an incubator, because they feel that then they’re prepared. Someone’s really guided them. So, there’s some people that actually just will focus on those kind of companies, those graduates.

Nice. Now you mention being a gate keeper. I guess that if I was reading this and I didn’t have access to these exclusive events to meet the families themselves, what would be the best way to connect with people like you? And, how would I get to know someone that is a gate keeper to a family office? What are the best practices? Is it reading your blog, or reaching out to you on social media? What would you recommend?

That’s a great question. We all use social media today, and I’ll give you an example of LinkedIn. I use LinkedIn, and I use it both ways. I use it for sourcing, but I also use it for business because I need to reach out to other people all the time. I reach out to VCs, family offices, private equity people all the time in my business because I have deals that I want to work on with them. So, I am in the same position as well, and I think social media is very useful.
What I like about LinkedIn is that you can see somebody’s past. Why would you want to connect with them? But also, I think that I get hundreds of people trying to connect with me on LinkedIn. There’s no message, and they have … it appears they have absolutely nothing in common with me. So, I would say always write a note. I would say, “Hi, I’m Katherine. I would really be interested in talking to you about blah, blah, blah.”

Yes, right.

Whatever, right? Or say, “oh, we have a friend in common.” Or, “oh, I saw you spoke at this conference,” or something. I have people who just randomly try to connect to me. I don’t connect back because what do they want?


Or, I cold call. I still do this to the day, but I prep. I find out where they went to school. I find out what they do, if they … anything, any kind of connection. Now, some families don’t have websites and are not on LinkedIn, for example, but their employees might be. If you scan for family offices, that does pop up.
Sometimes, they even say, “we only invest in private equity funds.” You say, “oh, okay. Great, now I know.” Or, you can find out that they’re on the board of certain companies. So, you’ll say “oh, I see you’re on the board of this technology company. I’m actually raising money for a technology company. Would this be something you’re interested in?”
I think you need to be prepared that way, but it’s not always easy because VCs, private equity, they usually have websites that describe exactly what they do. It’s not that difficult to figure out, but sometimes families, you have no idea. So, it’s got to be a relationship.
Now, people come to me for introductions, so that’s part of what I do as a business. There are other people out there, but I would give a little caution. There are people who sell lists. You know, everybody knows this, there are lists for every industry. There are lists for family offices. Well, the first thing I do when someone pitches me that is I say, “okay, I want to see a sample,” and I look for myself. Because, I’ve worked for some of these families and they’ll have information that’s dated.
It’s like from my contact information from 7 years ago. So, people buy those lists for thousands of dollars, and they’re worthless. Or, you may get someone, but you have no relationship with them. It’s very difficult. You’ve got to know your stuff. So, cold calling, it’s worth doing. It’s tough, but if you can find some other way. If someone introduced you, that’s much better.

Right. I love that email etiquette you just said about make sure that you personalize it and do your homework before you reach out to somebody. Also, you had mentioned the importance to me earlier of follow-up. That’s one of my big, big things that I coach my clients on, too, is … and that’s a key to my success is follow-up. If I say I’m going to do something, I do it. It’s amazing to me people who don’t.

You’re totally right, and I have to tell you, I have done it myself where I’m so glad someone was persistent and called me, because we all get involved in our day-to-day and you get overwhelmed, and you forget to do something. So, it’s happened for, “I’m so glad you called again, because actually I am interested.” But, we all know fundraising is difficult; you have to have tough skin. You do have to be persistent, but also I also give people an out because if it’s a “no,” it’s better for you to know right away.

Oh gosh, yes.

You know, give me some feedback, good or bad. I’d love to hear from you either way. Actually, a lot of times when I start the relationship, I say, “listen, I’ve been in your shoes before.” I used to allocate billions of dollars, and my inbox filled up, and my voice mail filled up, but I wanted to be fair to people because that’s just the way I was raised. I don’t want to lead people on, so I’d say, “you know what? I think your idea’s great. It’s not for us, so I’m just telling you now. Don’t waste your time on me. Maybe I can introduce you to somebody else.” Also, I think that as people who allocate money, they could be more fair, and they could do a better job of letting you know.

Yeah. It’s like Hollywood. They always sort of string you along. They don’t give you a definite “no” on your screenplay or whatever.

Yes! Now, sometimes the answer isn’t clear, I’ll say that. It’s an investment committee, the investment committee hasn’t decided. But, sometimes you know it’s just not a fit, and I think people could be more fair. Fine.

Right, yeah.

But anyway, getting back to what we were saying. Also, this is another thing. Pet peeve: do not send an email that could be a novel. No one reads it! No one is reading it!

Keep it short, yup.

5 bullet points: why? What is unique or special?

Yes. Well, that dovetails into my next question for you, which is the presentation dos and don’ts. I mean, obviously don’t have a lot of stuff on your slides, don’t have too many slides. But, I’m sure you have a lot of other tips besides those.

Yes. Constantly just rip apart presentations. When I say institutional quality, you want it to look super sharp. Now, that doesn’t mean you need crazy graphics, but you want to have it bound, have it look nice, not use PowerPoint’s basic, they have backgrounds that you can choose.
It doesn’t have to be that you hire someone to do that unless you want to, which can help. But, I would say really make your message clear. Use bullet points. People don’t want long, long, long explanations.
I would really emphasize short emails, to the point, and then they’ll look at your materials. I also really recommend, especially if you’ve got IP that you’re sensitive about, maybe there’s some things about your whole business model you don’t want to reveal. Then, I do a teaser, 1 or 2 pages. I just send that. If they’re interested, they will come back to you.
But wait, there’s more!?

This post has been adapted from The Successful Pitch podcast. Listen to this past episode for more on the inspiring story of KATHERINE HILL RITCHIE

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As a funding strategist, John Livesay helps CEOs craft a compelling pitch which engages investors in a way that inspires them to join a startup’s team.

After a successful 20-year career in media sales with Conde Nast where he worked across all 22 brands in their corporate division [GQ, Vanity Fair, Wired, W and Vogue] and created integrated programs for clients such as Lexus, Hyundai and Guess, John won salesperson of the year in 2012 across the entire company.

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