Web3 Family Office Investment Guide

In recent years, family offices have gradually evolved from asset management tools for the elite circle into comprehensive asset governance platforms for high-net-worth individuals. Especially with the rise of emerging investment fields such as Web3 and RWA, more and more investors are beginning to ponder: Am I suitable to participate in these investments through a family office? How can I establish an appropriate structure? In the face of the high volatility and complexity of the crypto world, how should I formulate investment strategies and execution plans?

This article will explore from a practical perspective how family offices are established, utilized, and optimized as an investment avenue, focusing on answering the following three core questions:

1. Who is suitable for adopting the family office model to enter the Web3 space?
2. How to build a practical and effective family office structure?
3. How should family offices develop Web3 investment strategies and execution plans?

Who is suitable for adopting a family office model?

Family offices are not suitable for everyone; their core value lies in managing complexity. If your assets are relatively concentrated, trading frequency is low, and investment channels are simple (such as fixed income products, real estate, domestic funds, etc.), then the management capabilities of a family office may far exceed your actual needs, potentially leading to a cumbersome structure and excessive costs.

However, for the following types of people, family offices are almost the only option that can simultaneously balance security, structure, and growth.

1. Large and complex asset scale: investable assets exceed ten million RMB, involving various types such as equity, real estate, overseas funds, digital assets, etc., and may also include different currencies, accounts, and holding entities.

2. There are cross-border structural needs: including but not limited to overseas immigration, offshore companies, non-Chinese tax resident status, as well as overseas investment, identity planning, and the dispersion of family members.

3. Preference for Structured Product Investment: In the Web3 field, fund-type tokens, convertible bonds, income certificates, tokenized equity, and other new types of structured products are increasingly being opened only to "qualified investors" or legal entities.

4. Need for long-term asset management capabilities: Hope to achieve intergenerational inheritance and continuation of family will through asset allocation, or invest in RWA and other assets that require long-term operation.

The common characteristic of these groups is that their asset allocation goals are not short-term gains, but rather long-term value across cycles; their investments are not merely speculative actions, but rather structural participation.

In this case, the management structure of the family office is no longer just a status symbol, but a practical management tool.

How to Build a Practical Family Office?

Building a family office is not a one-size-fits-all process; its core task is to address practical issues. Many people mistakenly believe that establishing a family office is simply about purchasing a set of services from a trust company, law firm, or professional FO company. In reality, a truly effective family office must be tailored to the family's structure, asset portfolio, and investment goals.

In the context of Web3, a practical family office needs to address at least the following four aspects:

Clearly establish purpose

Are you aiming for tax optimization, cross-border identity configuration, or to obtain investment qualifications for specific projects? Or is it to plan a portfolio of crypto assets for the next generation? Clarifying your purpose is the basis for structural design and resource allocation.

Select the appropriate type

• Single Family Office (SFO): Suitable for a capital scale of over 30 million RMB, it is advisable to consider establishing an independent team with self-operating capabilities.
• Multi-Family Office (MFO): Suitable for funds around 10 million RMB, can collaborate with professional service institutions to provide management, compliance, investment research, and other services.
• Virtual Family Office (VFO): Suitable for families with smaller capital sizes, lightweight operations can be achieved through an outsourced network composed of law firms, trust institutions, and financial advisors.
• Cross-border single family office: commonly used to solve issues related to identity, tax, and investment channels, it is currently the most common choice for families in China.

Architecture and Legal Design

A typical family office structure usually includes:

• Offshore holding entities (such as BVI/Cayman/SPV) for holding and investment.
• Trust or fund structure for tax optimization and inheritance arrangements.
• Legal advisors and compliance teams for ongoing monitoring and adjustments.
• "Investment vehicle accounts" that interface with Web3 projects, such as enterprise-level wallets, dedicated custody accounts, etc.

Professional Resource Allocation

Establishing a family office requires not only capital but also matching professional roles such as legal, tax, financial, and technical advisors to ensure that the structure operates compliantly and investments are implemented smoothly. Many family offices choose to set up entities in Singapore while establishing financial collaboration teams domestically, forming a model of "internal and external linkage."

Building a family office can be roughly divided into three levels:

1. Identity and Structural Framework

   • Clarify tax resident status, family member structure, inheritance path
   • Establish domestic/foreign holding entities, trusts, or SPVs
   • Solve the compliance path for asset holding, tax declaration, and cross-border circulation.

2. Governance Mechanism and Authorization System

   • Establish a family governance mechanism (such as an investment committee, will, equity agreement)
   • Establish an internal and external consulting system (division of roles such as legal, tax, investment, management, etc.)
   • Establish authorization mechanisms and supervision processes

3. Asset Allocation Strategy

   • Set long-term allocation ratio
   • Match the lifecycle rhythm of various assets
   • Set up take profit and stop loss mechanisms, risk adjustment mechanisms

How Family Offices Can Participate in Web3 Investments?

Participating in Web3 investments through family offices is not just about switching accounts to invest in projects; it's about redefining your role, investment path, and strategy. Establishing a structure is just the starting point; the real core lies in "how to invest."

Web3 investment is characterized by high volatility, high technical barriers, and changing regulations, which must be addressed through "structured design".

Set investment identity

Web3 project identity integration usually includes:

• Direct Legal Entity (Company): An offshore company established by a single family office to interface with investment agreements.
• SPV Holdings: Holding assets through a third-party SPV and controlling voting rights.
• Trust Beneficiary: Establish a trust through a family office to hold Tokens or equity, facilitating tax optimization and intergenerational planning.

It is recommended that family offices collaborate with law firms and compliance institutions to establish identities in accordance with the legal system of the project's location, in order to avoid missing investment opportunities due to "no qualified entity."

Matching Asset Type

The types of Web3 assets suitable for family offices include:

• RWA (Real World Assets): such as tokenized bonds, real estate, income sharing agreements, etc.
• Structured funds: such as yield tokens, re-staking protocols, yield certificates, etc.
• Equity-type assets: such as convertible bond tokens, dividend tokens, DAO governance tokens, etc.

It is not recommended to participate in purely speculative projects that "lack real asset support, governance structure, and exit mechanisms" in large proportions.

Set investment rhythm and risk management mechanism

The biggest difference between Web3 investment and traditional PE/VC is the uncertainty of the rhythm. Family offices should refer to the following mechanisms for allocation:

• Set the "acceptable lock-up period" and exit window
• Design a "staged investment" mechanism to release funds based on project progress.
• Configure "Yield Reinvestment" pool to increase investment in quality projects.
• Clarify the rhythm of tax declaration and establish reporting and auditing mechanisms.

Governance Participation and Deep Collaboration

A high-end family office is not just an investor:

• In RWA projects, roles such as auditor, governance representative, custodian, etc. can be held.
• In the DAO, you can participate in governance by staking tokens and configuring a "strategy wallet" for voting.
• In on-chain protocols, it can be embedded in collaboration processes as a long-term LP, delegator, or ecosystem collaborator.

This type of "embedded investment" not only enhances the certainty of returns but also makes it easier to form information advantages and reinvestment opportunities.

Common Misconceptions and Pitfalls to Avoid

As Web3 enters deeper waters, the key to investment is no longer "whether to invest" but "in what capacity and in what manner to invest." Family offices are a structural vehicle that can carry long-term governance capabilities, legal identity allocation, and asset flow paths. They enable investors to be not just bettors, but also structural designers, governance participants, and value depositors.

However, many newly established family offices tend to fall into the following misconceptions when engaging with Web3:

1. Treat the family office as a shell: merely establishing a company without a compliance path, financial processes, and tax disclosures will ultimately make it difficult to gain recognition from banks and regulatory bodies.

2. Lack of investment governance capacity: Only establishing a legal entity account without a budget and redistribution mechanism leads to investments being unable to be effectively tracked and adjusted.

3. Blindly pursuing profits while ignoring compliance boundaries: Participating in "unlicensed dividend projects" may lead to fund freezing or fines once regulatory authorities intervene.

Therefore, it is recommended that after establishing a family office, at least the following mechanisms should be formed:

• Annual Investment Plan and Analysis Review
• Clear compliance review and audit mechanisms
• Professional team equipped with ongoing legal advisory services

Finally, it is important to emphasize once again that family offices are not suitable for everyone. They require sufficient capital scale, a long-term investment willingness, and collaborative resources to truly be effective.

The key to deciding whether to adopt the family office model does not lie in "Do I have enough funds?" but rather in "Do I need a structure to undertake cross-cycle governance tasks?" If the answer is yes, then a family office is not only a container for wealth but also a long-term base for entering structured investments in Web3.