But now, in a time when internet companies are toppling legacy players at an unprecedented pace, things are starting to change. Globally, 75 percent of family offices have invested directly into startups, and 25 percent have sourced their own deals, according to a survey by Silicon Valley Bank and Campden Wealth. In fact, the number of direct venture deals carried out by family offices has increased by 600 percent over the last ten years.

Asia’s family offices are no exception, especially with the region’s growing affluence. More than 1,300 family offices were located in Asia-Pacific in 2019, reflecting an increase of 44 percent in just two years. These companies in the region reported an average family wealth of US$908 million and $600 million in assets under management.

Like their American and European counterparts, many of Asia’s family offices have historically invested in areas like property and private equity. Tech startups were only part of the picture via third-party venture funds.

But family offices are looking beyond traditional asset classes now and adding fledgling e-businesses to their portfolios. This increase in risk appetite and investment diversification has primarily been spearheaded by the younger generation, who find startups more innovative and often run in the same social circles as founders.

The shift has also been driven by COVID-19, which forced many businesses to reinvent themselves entirely. The pandemic also thrust the already-growing digital industry into the spotlight — one in three of Southeast Asia’s internet consumers adopted new digital services because of the pandemic, according to Google’s most recent e-Conomy SEA report.

As direct investors, family offices can often deliver far more value to early-stage startups than venture capital firms can. Adding a company to your portfolio means providing them with resources, networks, and mentorship to help them grow and flourish, which in turn benefits your company in the long run.

While early-stage venture capital (VC) firms “spray and pray” by throwing money down on the table and hoping that a startup reaches critical mass later on, family offices can afford to take a much different posture. They can embed tech startups directly into their existing business infrastructure. The idea is that it may give the venture what it actually needs, not just to survive, but to reach a scalable product-market-fit.

Many family offices have been around for several generations. With lean teams (the average family office has about nine staff members), family offices are often efficient and centralized when it comes to ops. They also tend to have a range of in-house expertise, which most VC firms lack. On top of providing a valuable network of potential clients and partners, this also means being able to guide founders through the ups and downs of running a business in a specific industry.

Family offices that still harbor doubts about working with startups can find assurance in some regional success stories.

One of the most well-known is K3 Ventures, the family office of Kuok Meng Xiong, the grandson of Malaysian business magnate Robert Kuok. Singapore-based K3 Ventures has closed deals with Bytedance, TikTok’s parent company, and Southeast Asian ride-hailing giant Grab. The latter was one of the family office’s earliest bets. Way back when Grab was still named MyTaxi, Meng Xiong put money into the startup and helped its drivers obtain permission to wait in hotel driveways.

While it might seem risky to pour money into a nascent company, that’s not necessarily the case if you come correct with the right tools and market access the way that Meng Xiong did. To date, K3 Ventures has seen average returns of 43 percent.

Zooming in on Indonesia, Emtek led a $234 million funding round for Indonesian e-commerce unicorn Bukalapak, together with Microsoft and Singaporean sovereign wealth fund GIC, in April this year. This allowed Bukalapak to tap into the media empire that Emtek has established since 1983, which includes online and digital media, telecoms, and IT solutions. With its market debut on the IDX in early August, Bukalapak managed to raise Rp21.9 trillion ($1.5 billion) in an IPO that was oversubscribed by nearly 900 percent, making it the largest IPO to date on the local exchange.

Investing is not just about providing capital. This idea is even more important for family offices, which – when putting money into startups – find themselves competing with VC firms.

While tech startups do present a high-risk profile, they also represent opportunities for diversification and (if you strike gold) outsized returns. Like with any other company, investing in a startup means doing your research beforehand. It goes without saying that you have to speak with founders carefully and deliberately to make sure that both parties can work with and add value to each other.

If there’s alignment with the family office’s core business, you can offer the startup a sort of “testbed”, where the family’s business becomes an early customer. This is the best place to start for new investors. Because it’s a phase of experimentation within the safe confines of your company, the startup can be free to fail, restart, tweak, and refine their operations to find the best, most scalable business model. In a way, you can think of it as a “training ground” for the startup that prepares them for the challenges of larger business ecosystems.

Another way to get involved with tech ventures is by offering to act as a go-to-market partner. This can be done in a variety of ways, depending on the startup’s maturity. If a founder is unclear about their localization strategy, your family office, with its years of operating, can help the startup get positioned exactly right in the market. If your core business is already serving the same niche, think about how the startup can add value to your machine, and vice versa.

For example, another interesting investment from Southeast Asia was Indonesian conglomerate Djarum’s acquisition of online travel agent Tiket.com in 2017. Djarum acquired the already mature company through its e-commerce division Blibli, a deal that had a two-pronged implication. Firstly, it allowed Blibli to instantly get in on the travel market. Next, it increased the size of Tiket’s consumer base, which was already large to begin with. The deal and alliance helped strengthen each company’s competitive moat beautifully.

Finally, it’s crucial to have a dedicated team within your organization to make sure that all this actually happens.

Too often, I see top-level executives at big family offices back early-stage tech startups, with grand promises of getting the company integrated into the core business. But, unfortunately, plans often don’t come to fruition due to a simple lack of follow-through. The startups receive cash, but then get ignored, neglected, or met with internal resistance by middle management.

Don’t fall victim to this. You made an investment, a promise, and a plan. Make sure it gets executed.

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The writer is CEO of Prasetia Dwidharma and Indonesia's angel investor, who has backed more than 100 cutting-edge tech startups across ASEAN, China, India, and Silicon Valley