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Family equity refers to investments made by entrepreneurial families or family offices in companies, often in the SME sector.
Unlike traditional private equity investors, family equity investors generally do not invest through funds with fixed terms. Rather than a quick resale, the focus is on the long-term development of a company.
Many family equity investors have personal experience in building and managing companies. This often leads to a partnership with entrepreneurs and management on an equal footing.
Many small and medium-sized businesses have grown over many years or even decades. They have been strongly shaped by the entrepreneurs who founded and built them.
When a new partner joins or additional capital is needed, it is therefore not just about the price. For many entrepreneurs, the key factor is finding a partner with whom the company can continue to grow in the long term.
Many entrepreneurs are looking for investors who:
Family equity investors often meet these very expectations because they have an entrepreneurial mindset and are not bound by short investment cycles.
The company continues to grow successfully and needs additional capital for investments or expansion.
Business owners want a partner who isn't focused on a quick resale.
The entrepreneurs and management intend to continue to take responsibility and further develop the company in partnership with an investor.
An additional partner is expected to bring new perspectives, experience, and stability to the company's development.
A Comparison of Equity Investments
Family equity is often compared to traditional private equity investments. Both models provide capital to companies, but differ significantly in structure and approach.
Since the succession solutions available on the market vary significantly, it is advisable to follow a structured approach when selecting the right investor.
Talk to different types of investors and familiarize yourself with their approaches. The goal is to develop an understanding of how each investor thinks and operates.
This will help you lay the groundwork for asking the right questions during your discussions—such as those regarding time horizons, influence, or strategic direction.
Once you have decided on a form of investment, focus on suitable investors within that group. During in-depth discussions, compare specific offers and determine which solution best suits your company.
Especially at this stage, it can be helpful to bring in experienced advisors to better evaluate and compare offers.
Ultimately, the goal is to select a partner who is a good fit for your company not only financially, but also strategically and personally.
Over time, many small and medium-sized business owners are faced with the question of how their company’s ownership structure should evolve in the long term. In Germany, thousands of family-owned businesses seek a succession plan or a new partner every year.
In many cases, business owners have traditionally had two main options: selling to strategic buyers or to private-equity investors. In recent years, family equity has increasingly established itself as a third alternative.
One reason for this lies in the origins of many family offices. They often emerge when entrepreneurs have sold their own companies and subsequently invest their capital for the long term. As a result, many family equity investors bring not only capital but also their own entrepreneurial experience to the table.
For many entrepreneurs, this creates a form of investment that combines capital with an entrepreneurial perspective and is more focused on continuity and long-term growth.
FORUM invests in medium-sized companies as a family equity investor and supports their long-term growth.
The capital comes from a Munich-based family of entrepreneurs and is invested with a long-term perspective. The focus is not on the short-term sale of a company, but on its sustainable growth.
In addition to capital, FORUM also brings its own entrepreneurial experience to the table. We collaborate with entrepreneurs and management as partners, with a focus on the long-term development of the company.
Many small and medium-sized business owners are looking for investors who understand their entrepreneurial mindset and don’t view decisions solely from a financial perspective. FORUM’s family equity approach is based precisely on this understanding.