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For decades, buying stock in a hot startup meant being allowed to invest in the funds run by the top VCs. But with the AI boom causing an investment frenzy, more family offices and private wealth are skipping the VC middlemen to get directly onto the cap table.\u00a0<\/p>\n
\u201cCompanies are staying private\u00a0longer, and there are fewer IPOs now than we\u2019ve seen historically,\u201d Mitch Stein, founder of Arena Private Wealth, an investment advisory firm for high-net-worth individuals, told TechCrunch on a recent episode of Equity.<\/a> \u201cA lot of money is being made well before companies go public, and right now the private markets are dominated by a lot of these AI names. The family offices who are allocating [directly into AI startups] are right on.\u201d<\/p>\n Arena recently co-led a $230 million round<\/a> into AI chip startup Positron, an investment that earned the midwestern firm a board seat. Stein says that\u2019s part of a deliberate shift away from being passive allocators and toward becoming \u201cactive participants in the capital markets.\u201d<\/p>\n The urgency amongst today\u2019s family offices is real.<\/p>\n \u201cThe world\u2019s AI infrastructure is being built now, so you\u2019re either going to get in early and have an opportunity to do more primary investing\u2026and really build a portfolio, or you\u2019re going to miss it and be taking random bets,\u201d Ari Schottenstein, Arena\u2019s head of alternatives, told TechCrunch.\u00a0<\/p>\n Stein put it more bluntly: \u201cYour biggest risk is not having exposure to AI, not what could happen to your AI investments.\u201d<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco, CA<\/span> The numbers reflect this sentiment. In February, family offices made 41 direct investments<\/a> into startups, nearly all of them tied to AI. Among those are high-profile names like Laurene Powell Jobs\u2019 Emerson Collective into World Labs, Azim Premji\u2019s family office into Runway, and Eric Schmidt\u2019s Hillspire into Goodfire. According to BNY Wealth research, 83% of family offices say AI is a top strategic priority over the next five years, and more than half have AI exposure through investments.<\/p>\n Some are going further still. A growing number of family offices are incubating their own AI companies, seeding the first several million, taking on operational roles, and deploying the same entrepreneurial instincts that built their wealth in the first place, according to Schottenstein. Jeff Bezos\u2019 decision to serve as CEO of his own robotics company<\/a>, which raised an initial $6.2 billion last year at a nearly $30 billion valuation, is a high-profile example of the model.<\/p>\n On a smaller scale, Stein pointed to Tyson Tuttle, an Austin-based angel investor and former CEO of Silicon Labs \u2014 which agreed to be acquired by Texas Instruments for $7.5 billion. Tuttle co-founded Circuit, a startup using AI to improve manufacturing and distribution, raising a $30 million angel round<\/a> that includes $5 million from his own family office.\u00a0<\/p>\n Not everyone coming to the table has founded a company, though. Arena\u2019s team comes from institutional finance, and they argue that rigorous due diligence is what earns them the right to lead rounds.<\/p>\n \u201cWe take our time, we\u2019re a very slow \u2018yes,\u2019 we say \u2018no\u2019 a lot,\u201d Schottenstein said. \u201cWe definitely invest in the sources and experts and people necessary to make sure that a company is what it says it is and can do what it says it will do.\u201d<\/p>\n For the Positron deal, that meant working with third-party experts to validate the technology, but also reading the cap table itself as a signal: \u201cIf Arm is coming into a deal, we\u2019d like to think your technology is real,\u201d Schottenstein said. Arena also knew Oracle was a major customer, making Positron one of the only AI chips deployed into a hyperscaler not named Nvidia or AMD.<\/p>\n That selectivity shapes how Arena participates once it\u2019s in. Unlike a typical VC spreading risk across a portfolio, Arena makes a small handful of direct deals per year, which changes the stakes entirely.\u00a0When they\u2019re in, they\u2019re all in; Positron is their one and only AI inference chip investment.<\/p>\n \u201cWhen we participate in single asset direct deals and only do a small handful every year, our stakes are incredibly high,\u201d Stein said. \u201cWe are not managing portfolio-level returns. We don\u2019t model in failure on a single asset transaction. We are taking a tremendous amount of risk with concentrated client capital. We\u2019re taking on reputational risk as a firm. We\u2019re allocating a tremendous amount of time and resources. There\u2019s an alignment there that founders appreciate.\u201d<\/p>\n<\/div>\n
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\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 13-15, 2026<\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n