Family offices are skipping VC middlemen to bet directly on AI

The midwestern firm Arena Private Wealth, an investment advisory firm for high-net-worth individuals, is shifting from passive allocation to active participation. The firm recently co-led a $230 million investment round into Positron, an AI chip startup. This move represents a broader shift toward primary investing—which refers to investing directly into a company during a funding round rather than allocating capital through third-party venture funds. “Companies are staying private longer, and there are fewer IPOs now than we’ve seen historically,” said Mitch Stein, founder of Arena Private Wealth. This environment is pushing family offices—private wealth management firms that serve ultra-high-net-worth individuals—to seek direct access to startup capitalization tables, or cap tables, which track who owns what share of a company.

This direct investment trend is accelerating as private wealth managers prioritize artificial intelligence. Research from BNY Wealth shows that 83% of family offices identify AI as a top strategic priority over the next five years. In February, family offices made 41 direct investments into startups, with nearly all of those deals tied to AI. High-profile examples of these direct transactions include:

• Emerson Collective investing in World Labs.
• Azim Premji’s family office investing in Runway.
• Eric Schmidt’s family office, Hillspire, investing in Goodfire.

Beyond simply funding existing startups, some family offices are incubating their own companies or taking on operational roles. For instance, Jeff Bezos serves as CEO of his own robotics company, which raised an initial $6.2 billion at nearly a $30 billion valuation. On a smaller scale, Tyson Tuttle, an angel investor and former CEO of Silicon Labs—which agreed to be acquired for $7.5 billion—co-founded Circuit, a startup using AI to improve manufacturing and distribution. Circuit raised a $30 million angel round, which included a $5 million investment from Tuttle’s own family office.

To manage the risks of these concentrated bets, firms like Arena emphasize rigorous due diligence. Arena’s team, which comes from institutional finance, conducts deep technical validation, such as verifying that a startup’s technology is deployed with a hyperscaler—a massive cloud computing provider. This selective approach allows them to make a small handful of direct deals each year. According to Stein, the greatest risk for these firms is lacking exposure to AI, rather than the potential downside of their AI investments.

Why it matters

Family offices are moving from passive allocators to active participants in the AI market, bypassing traditional venture capital to secure early, concentrated stakes in infrastructure-critical startups.