New Investment Approaches in Web3: The Role and Practices of Family Offices

In recent years, family offices have gradually transformed from "exclusive asset managers" in elite circles to "asset governance control platforms" in the eyes of high-net-worth individuals. Especially with the emergence of new investment fields such as Web3 and RWA, more and more investors are beginning to contemplate: Am I suitable to participate through a family office? How do I build an appropriate structure? In the face of the high volatility and complexity of the crypto world, how should I formulate allocation strategies?

This article will explore from a practical perspective how family offices can be established, utilized, and optimized as an investment path, focusing on answering the following three key questions:

1. Who is suitable for adopting the family office approach to enter Web3?
2. How to build a practical and effective family office structure?
3. How should family offices formulate Web3 investment strategies and implementation plans?

Who is suitable for the "family office path"?

Not everyone needs a family office, as its core value lies in "governing complexity." If your assets are relatively concentrated, your trading frequency is low, and your investment pathways are relatively simple (such as fixed income products, real estate, domestic funds, etc.), then the governance capabilities of a family office may far exceed your actual needs, potentially leading to issues of structural bloating and high costs.

However, if you belong to any of the following groups, a family office may be the only ideal choice that balances security, structure, and growth:

1. Large asset volume with a complex structure: Investable assets exceed ten million RMB and span multiple fields including equity, real estate, overseas funds, and digital assets, involving different currencies, accounts, and holding entities.

2. There is a demand for cross-border architecture: including but not limited to overseas immigration, offshore companies, non-China tax resident status, as well as scenarios such as overseas investment, identity planning, and distribution of family members.

3. Investment Preference for Structured Products: Fund-type Tokens, convertible bonds, income certificates (Notes), tokenized equity, and other new structured products in Web3 are increasingly open only to "qualified investors" or legal entities.

4. Long-term governance capability is needed: It is hoped to serve intergenerational inheritance and the continuation of family will through asset allocation, or to allocate long-term assets such as RWA that require a "construction period + operation period + exit period."

The common characteristics of these groups are: assets are not pursued for short-term gains, but to traverse cycles; investment is not a single-point speculation, but a structural participation. In this context, the governance structure of family offices is no longer an identity label, but a practical tool.

What are the core considerations for building a "practical and effective" family office?

The establishment of a family office structure is not a one-size-fits-all solution. Its core task is to "solve real problems." Many people understand a family office as starting from "purchasing a service package" from trusts, law firms, or family office companies. However, a truly useful family office must be "tailor-made" around your family structure, asset portfolio, and investment goals.

In the context of Web3, a "practical and effective" family office needs to address the following four aspects at a minimum:

1. Establish a clear purpose: Are you looking for tax optimization, cross-border identity configuration? Or to obtain project investment qualifications? Or to allocate a set of crypto asset combinations for the next generation? Clarifying the purpose is the starting point for structural design and resource allocation.

2. Choose the right model:

   • SFO (Single Family Office): With a capital scale of over 30 million RMB, it is recommended to consider establishing an independent team with autonomous operational capabilities.
   • MFO (Multi-Family Office): With funds around 10 million RMB, consider collaborating with professional service institutions to provide management, compliance, investment research, and other services.
   • VFO (Virtual Family Office): Funds are not sufficient for independent establishment, and lightweight operation can be achieved through an outsourced network composed of law firms, trust institutions, and financial advisors.
   • Cross-border SFO (such as those established in Singapore): commonly used to address identity, tax, and investment channel issues, it is currently the most common option for Chinese families.

3. Architecture and Legal Design: A typical family office structure usually includes:

   • Offshore holding entities (such as BVI/Cayman/SPV) used for holding and investment.
   • Trust or fund structure for tax optimization and inheritance arrangement.
   • Legal advisors and compliance team for ongoing supervision and adjustments.
   • "Investment carrier accounts" that connect with Web3 projects, such as enterprise-level wallets and exclusive custody accounts.

4. Professional resource allocation: Having money alone does not qualify one to set up a family office. It is also necessary to match roles such as legal, tax, finance, and technical advisors to ensure that the structure operates compliantly and investments are successfully implemented. Many family offices choose to establish entities in Singapore and set up financial collaboration teams domestically to create "internal and external interaction."

Building a family office can generally be divided into three levels:

Layer 1: Identity and Structural Framework

• Clarify tax residency status, family member structure, and inheritance path.
• Establish domestic/foreign holding entities, trusts, or SPVs (depending on the type of assets and their location).
• Solve the compliance path for asset holding, tax declaration, and cross-border circulation.

This layer is the "legal identity certificate" for all Web3 investment activities. Especially when you participate in overseas RWA projects, the lack of structure equals "no channel".

Second Layer: Governance Mechanism and Authorization System

• Establish family governance mechanisms (such as investment committees, wills, equity agreements).
• Establish an internal and external consulting system (with roles divided among legal, tax, investment, management, etc.).
• Establish authorization mechanisms and supervision processes to ensure "someone is responsible, someone executes, and someone corrects".

This layer determines whether the family office is "operational". If everything relies on individual decisions, the family office becomes ineffective once an unexpected event occurs or if someone exits.

Layer Three: Asset Allocation Strategy

• Set long-term allocation ratios (e.g., RWA 40%, VC 30%, digital assets 10%, cash and liquidity 20%).
• Match the lifecycle rhythm of various assets (construction period, lock-up period, exit period).
• Set up profit and loss mechanisms and risk adjustment mechanisms.

This layer is key to whether family offices can "survive" in the market.

How Can Family Offices Participate in Web3 Investments?

When we say "participating in Web3 through family offices," it's not just about switching accounts to invest in projects; it's about reconstructing your role, path, and strategy. Clearly defining the structure is just the starting point; the real core lies in "how to invest."

Web3 investments are characterized by high volatility, high technical barriers, and changing regulations, which must be addressed through "structured design."

Set Investment Identity

Web3 project identity integration usually includes:

• Direct legal entity (company): Offshore company established by SFO to connect investment agreements.
• SPV Holdings: Holding assets through a third-party SPV and controlling voting rights.
• Trust Beneficiary: Establish a trust through a family office to hold Tokens or equity, facilitating tax optimization and intergenerational planning.

It is recommended that family offices collaborate with law firms and compliance institutions to establish identity based on the legal system of the project location, in order to avoid missing investment opportunities due to "lack of qualified entities."

Match Asset Type

The types of Web3 assets suitable for family offices to allocate include:

• RWA (Real World Assets): such as tokenized bonds, real estate, income share agreements, etc.
• Structured Funds: such as yield Tokens, re-staking agreements, yield certificates, etc.
• Equity-type assets: such as convertible bond tokens, dividend tokens, DAO governance tokens, etc.

It is not advisable to participate in projects that are purely speculative and lack real asset support, governance structure, and exit mechanisms in large proportions.

Set investment rhythm and risk management mechanisms

The biggest difference between Web3 investment and traditional PE/VC lies in the uncertainty of the rhythm. Family offices should refer to the following mechanisms for allocation:

• Set the "acceptable lock-up period" and exit window.
• Design a "staged release" mechanism that ties fund distribution to project progress.
• Configure the "Yield Reinvestment" pool to increase investment in quality projects.
• Clarify the tax declaration rhythm and establish reporting and auditing mechanisms.

Governance Participation and Deep Collaboration

High-level family office, not just investors.

• In RWA projects, family offices can serve roles such as auditors, governance representatives, and custodians.
• In the DAO, family offices can participate in governance through token staking and configure a "strategy wallet" for voting.
• In on-chain protocols, family offices can be embedded in collaborative processes as long-term LPs, trustees, and ecosystem collaborators.

This type of "embedded investment" not only enhances the certainty of returns but also makes it easier to form information advantages and reinvestment opportunities.

Common Misunderstandings and Pitfalls to Avoid

As Web3 enters the deep waters, investing is no longer about "whether to invest" but rather "in what capacity and how to invest."

Family offices are structural vehicles that can carry long-term governance capabilities, legal identity configurations, and asset flow paths. They allow investors to be not just bettors, but also structural designers, governance participants, and value repositories.

However, many newly established family offices tend to fall into the following misconceptions when engaging with Web3:

1. Misconception 1: Treating family offices as a front Establishing a company without a compliance path, financial flow, or tax disclosure ultimately makes it difficult to gain recognition from banks and regulators.

2. Misconception 2: Lack of investment governance capability Only one legal entity account is set up, but there is no budget and redistribution mechanism, making it impossible to effectively track and adjust the final investment.

3. Misconception 3: Blindly pursuing profits while ignoring compliance boundaries Participated in an "unlicensed dividend-type project". Once regulatory intervention occurs, it will lead to fund freezing or fines.

Therefore, it is recommended that after establishing a family office, the following mechanisms should be formed at a minimum:

• Annual Investment Plan + Analysis Review
• Clear compliance review + audit mechanism
• Professional team equipped + Continuous legal advisory

At the same time, it is important to remind that family offices are not suitable for everyone. They require a match in capital scale, long-term commitment, and collaborative resources to truly be effective.

Whether to pursue a family office path is not primarily about asking "Do I have money?" but rather asking: "Do I need a structure to undertake governance tasks across cycles?"

If the answer is affirmative, a family office is not just a wealth container, but also a long-term base for your entry into structural investments in Web3.