Mom and dad doing estate planning by themselves is going to be a disaster.

[02:05]

"Two of the kids are involved in the business. Two of them are not. Uh they're starting to think about what's going to happen when mom and dad die. They're 80 years old and they go down to the attorney and they do their typical wills and trusts, divide everything by four"

[07:30]

"Uh but we spend a lot of time on governance and uncovering all the family dynamics and getting the family around the table to have open conversations about what does the family want. And again, traditional estate planning is like I said earlier, mom and dad do it by themselves and that's going to be disaster."

[09:15]

"Touching on what Kib said, the culture part is really really important because a family and you know a family enterprise is is something that exists even or that should exist even when all the money is gone, right? What do you have left?"

Full transcript

Um so with this panel we're just going to focus on preferred structure strategies and communications that are working in today's environment for fam multif family single family virtual family offices and um you know there's a lot of ways of um skinning the cat here but before going into it I'd love for everyone to just take two minutes and introduce yourself and and your group and who you're with. Do you want to start off um on this side? Yeah sure. Hi hi everybody.

Thank you for the opportunity to be here tonight. Uh under the bright lights and great community here. Uh our foundation focuses on archival and history of our family me legacy as well as mentoring as a means to social and economic good. Uh we have a 20-year legacy of doing that and really going back to the origins of my family, Wilhelm Maybach in the late mid 1800s and the first Mercedes, first modern car.

Uh family office wise, we're probably 50% real estate and then as I'm based out of the Silicon Valley, we spend a lot of time in that space as well. Anyway, a pleasure to be here. I am a second generation family office and we started our own family office in America which is Va family office. Uh we did that after a very successful exit with my dad and a gas and storage facility in about 2014 I think and um uh our focus here right now is really focusing on technologies in safety and security center that helps uh our world to be a safer place for our children.

Uh we are getting into we are actually in defense sector as well. Uh and um looking forward to speaking with everybody today. Um uh the way I would describe that is what we do is we're looking for families under $250 million. Uh and a simple tip or typical situation is a family with a business. They got four kids.

Uh some in-laws are in involved in the business. Two of the kids are involved in the business. Two of them are not. Uh they're starting to think about what's going to happen when mom and dad die. They're 80 years old and they go down to the attorney and they do their typical wills and trusts, divide everything by four and you can imagine what's going to happen to the family.

Uh we try to keep that from happening and one of the ways we do that is by helping them build and operate their family office and a family foundation. Hi, I'm Sahil based here in beautiful Beverly Hills just a few minutes up the road. Uh I run a multif family office here which really runs the gamut. Um from real estate to uh further larger investment advice, tax advice, asset protection, uh philanthropy, fleet management, whatever it is you name it, both here and abroad.

Uh investments wise, we're we're mostly focused on real estate, both on the equity side and on the debt side. Um particularly private credit's a great place to be right now, but also in this crazy world where anything can happen and inflation is uh at 8% is not crazy. Um we're also chasing those larger asymmetric returns that can beat that and that that often comes from venture, but we're always open to to very unique and interesting structures. I'm a three-time tech founder uh and exited all three times, most recently to Bank of America about a year ago.

Uh we mostly focus on fintech and SAS, that's half of our company, and the other half of our company loves uh retail and multifamily uh commercial real estate. So, if you have a tech startup or any kind of software company here in the audience, we'd love to hear from you. Um or if you're looking for a GP on a partnership, we'd also like to talk to you on the real estate side. Uh I was a wireless guy for a number of years.

Uh I was an operator for T-Mobile, independent operator. I built up a network of 150 of my own stores. I sold that in 2017 and stood up a family office in Utah where I'm from uh with my two older sons. And uh we've been focused on uh primarily two areas cash flowing real estate in a number of asset classes uh multif family assisted living manufactured housing uh number of things and then also in uh private equity in independent sponsored uh smaller deals cash flowing typically rollups.

We like seeing child care, dental care, uh, HVAC, a number of of opportunities where you can take a a small cash flowing business and bring a bunch of them together and, uh, get a nice arbitrage on the the cash flow multiple. So, that's what we're focused on. Great. Great. Now, when we're going into preferred family structures, there's, you know, multif family, single family, virtual family office, centralized, decentralized.

I would love to maybe Danny you could just start off you know um just describe like the org chart and the structure you know of your family office right now. So we've got I mean we're less than 10 employees I would say we're a little bit more focused uh heavier focus on the tech side currently just because of the current real estate market. Um that's a beauty. We've been we've always been 50/50 tech real estate for the last 20 years.

Um, one of the benefits of that is when we feel like the real estate market's getting a little um, overpriced, we tend to focus more on the SAS side. When we feel like the software side's getting a little bit crazy, we tend to focus more on the real estate side. Um, I can't share the numbers, but we had a 49.5 time multiple on our fintech company that we sold to the bank, right? So, that's why I don't get that excited when I hear like, you know, 18% IRRa.

Uh when you're used to the software and tech side you you know you get used to those kind of multiples. So right now I would say we're about 10 employees. Seven of us are on the focus more on the fintech, SAS, business software side, AI, etc., etc. So uh that's sort of how our ORC chart looks. Then we have our own in-house on the real estate side.

We have our own in-house uh legal council uh development team as you want to call it. So, we bring a lot to the table, but most of the real estate deals we're doing today are two or three GPS come together, we take down a project. So, we're not really raising capital that often. When we do, we usually get it filled within 24 to 48 hours.

But, uh, the the three real estate projects we're doing right now, it's just it's either just our firm or it's us and one or two other family offices. That's great. And Kip, what about you? What what how is your family office like preferred structure right now? Uh well, we're a multif family office is the way I would describe what we do.

And again, because we have families from $30 million up to nine figures, uh it's it's very different for each family. So, what we really do is we focus on not only the financial side of the family, but we deal heavily on what's going on in the family relationships. Because if you don't solve the family relationships and all the conflicts that are going on there, it doesn't matter what you do on the financial side, it's going to go away at some point in time. So really the answer to your question is we spend so much more time and again we do all the financial stuff from all the investments.

Uh but we spend a lot of time on governance and uncovering all the family dynamics and getting the family around the table to have open conversations about what does the family want. And again, traditional estate planning is like I said earlier, mom and dad do it by themselves and that's going to be disaster. We want the kids to be involved in the succession planning. Great.

And Natalia, you know. Yeah. So, uh we are a single family office. Uh uh on the top it's also relatively small team. We have a little bit a different structure because we're actually utilizing a public vehicle on ODCQB which a lot of people don't understand a lot of advantages that it has over you know NASDAQ and other boards because we are not only majority shareholder but we have 100% voting shares but what uh it does it helps people who want to participate provide them some liquidity so we use that vehicle as incubator for some of the technologies that we we do take them to the market uh we also have you know a media company uh we um uh in and that's what we we use to help companies to get to the market.

Uh but also we do just investments in uh safety and security space. Uh we're always looking for other projects in this area for point of rollups or investing because you know once they graduate and have them uh minimum viable product then we put them in different SPs do rollups you know do M&A or uh take them public. So that's kind of overall structure. Okay.

So I know I know you you don't with your dad um how are you guys set up? What's your preferred structure? Yeah, I mean we're I mean everything is we're our office is certainly much more virtual than not. It it really is just me in terms of executive and I've I've got two employees both in a separate time zone and uh well I'm sure we'll we'll get to that a little bit later.

Touching on what Kib said, the culture part is really really important because a family and you know a family enterprise is is something that exists even or that should exist even when all the money is gone, right? What do you have left? You have all the different types of capital that your family can acrue whether it's social and and to do with their reputation or maybe strong religious values or whatever because you know everybody always says you know shirt sleeves to shirt sleeves in three generations rags to richest to rags again but we don't really think about what you know one level deeper well what does that really mean it means that well you know say if you're on your second generation and they're paying you know their insurance their taxes their rent whatever the actual dollar that they're using is likely not a dollar that was generated in the previous generation because all of those running operating expenses. Um what's required is to have that culture of wealth generation of of acrewing value so that you know things keep flowing in as time goes on as the generations goes on and then you don't have that problem of trying of reverting back to you know sort of the financial state your family was originally in.

Okay. Um, thank you. You said that pretty much the way I paid you to do that.