Family Office: A New Option for Web3 Asset Management

In recent years, with the emergence of new investment opportunities such as Web3 and the tokenization of physical assets, family office (Family Office) is gradually becoming an important tool for managing assets among high-net-worth individuals. This article will explore how family offices are established, used, and optimized as an investment pathway, focusing on answering the following three questions:

1. Who is suitable to participate in Web3 investments through family offices?
2. How to build a practical family office structure?
3. How should family offices develop Web3 investment strategies and execution plans?

Who is suitable for setting up a family office?

The core value of a family office lies in managing complex assets. If you meet any of the following criteria, a family office may be the best choice for you:

• Large and complex asset scale: investable assets exceed ten million RMB, involving various types of assets, currencies, and holding entities.
• Cross-border demand: involves overseas immigration, offshore companies, non-Chinese tax resident status, and other situations.
• Tend to invest in structured products: such as fund-type tokens, convertible bonds, income certificates, and other complex financial products
• Long-term asset management is needed: for intergenerational inheritance, continuation of family wishes, or long-term asset allocation.

The commonality among these groups is: asset allocation is oriented towards long-term value rather than short-term gains; investment strategies focus on structural participation rather than point speculation.

How to Build a Practical Family Office?

A practical family office should be tailored to actual needs rather than simply purchasing off-the-shelf services. In the context of Web3, the following aspects need to be considered:

1. Clearly establish objectives.

Is it for tax optimization, cross-border identity configuration, or to obtain investment qualifications for specific projects? Depending on the purpose, the structure design and resource allocation may also vary.

2. Choose the appropriate type

• SFO( Single Family Office ): Suitable for a capital scale of over 30 million yuan, can establish an independent team.
• MFO( Multi-Family Office ): Suitable for a capital scale of around 10 million yuan, can cooperate with professional institutions.
• VFO( Virtual Family Office ): Achieving lightweight operations through outsourced networks
• Cross-border SFO: often used to address issues of identity, taxation, and investment channels.

3. Architecture and Legal Design

Typical architecture includes:

• Offshore Holding Entity
• Trust or fund structure
• Legal Advisor and Compliance Team
• Dedicated investment account ( such as enterprise-level wallet )

4. Configure Professional Resources

It is necessary to have professionals in legal, tax, financial, and technical aspects to ensure compliant operations.

Strategies for Family Offices to Engage in Web3 Investments

Family offices participating in Web3 investments should not just change accounts to invest in projects; they need to reposition their roles, paths, and strategies. Here are a few key considerations:

1. Set investment identity

You can choose to be a direct legal person, SPV holding, or trust beneficiary, which needs to be determined according to the legal system of the project's location.

2. Match Asset Type

Web3 assets suitable for family offices include:

• Tokenization of physical asset projects
• Structured Fund
• Equity-type assets

It is not advisable to participate in pure speculation projects in large proportions.

3. Investment Rhythm and Risk Management

• Set acceptable lock-up periods and exit windows
• Adopt an installment release mechanism
• Configure the yield reinvestment pool
• Clarify the rhythm of tax declaration

4. Participate in governance and deep collaboration

High-level family offices can serve roles such as audit and governance representatives in projects, or participate in DAO governance through token staking. This deep involvement helps enhance revenue certainty and gain information advantages.

Common Misconceptions and Recommendations

When establishing a family office to participate in Web3 investments, the following misconceptions should be avoided:

1. Treat the family office as a simple "shell" company.
2. Lack of investment governance capability
3. Blindly pursuing high returns while ignoring compliance risks

It is recommended to establish at least the following mechanisms:

• Annual Investment Plan and Review Analysis
• Compliance Review and Audit Mechanism
• Professional team equipped with legal advisor support

It is important to emphasize that family offices are not suitable for everyone. They need to be matched with the scale of funds, long-term planning, and professional resources in order to truly be effective. For investors with long-term asset management needs, family offices are not only a wealth management tool but also an important platform for entering into structural investments in Web3.