The SpaceX IPO and the anticipated initial public offerings of Anthropic and OpenAI will make thousands of their employees and investors dramatically wealthier, leading to a surge in new single-family offices in the near future, and intensifying the already fierce competition among software companies that court them as customers.
For the venture- and private-equity-backed software companies, the opportunity to grow is greater, but the stakes are higher, founders, executives and consultants say.
Out of the thousands of SpaceX employees to become millionaires after the company’s blockbuster IPO, about 400 will earn $100 million or more. Anthropic and OpenAI are both expected to go public this fall and target valuations of several hundred billion dollars or more, also making hundreds of employees equally wealthy. And that’s to say nothing about the investment firms and other private investors who invested in those three companies and stand to make huge gains. If market conditions remain conducive, other companies will IPO this year as well.
“I've sat through a few of these liquidity waves. This one doesn't look like the others. I don't think there's a real precedent for it, and it's broader than just these three IPOs,” as employees sell shares in a maturing secondary market and defense companies and others have taken off, said Raymond DiNunzio, a partner at TOS Advisors, which helps single-family offices establish and run their operations. Prior to starting TOS, DiNunzio spent 18 years at UBS, where he was part of the private wealth management and family office groups.
At least several hundred new people will likely become worth more than $100 million over the next two years. Many of them will choose to establish a family office, which will quickly and significantly expand that customer market for all kinds of products and services.
In 2024, Deloitte estimated there were about 8,000 single-family offices globally and that the number would grow to 10,720 by 2030, representing a 75% increase over a 10-year period. Deloitte could not be reached before this newsletter was sent to confirm whether its projection accounted for factors such as major AI-related IPOs and the associated wealth creation. Regardless of whether the number of family offices is currently on track to meet or exceed Deloitte’s projection, a surge is imminent.
As hundreds of new single-family offices form over the coming two years, eyes at software companies have already widened. Many offices spend six figures annually on software to help them manage their complex mix of businesses, properties, entities and investments, but they can be mercurial prospects with painfully long sales cycles. It’s far easier to convince a new family office to become a customer than an old one to make a change. In a relatively small and increasingly competitive market, hundreds of new offices to sell to is exciting.
Of course, all the software companies know this, and some are preparing accordingly. DiNunzio said companies he works with are already “constantly” talking about this. “Everybody's quietly redoing their segmentation models right now. Nobody wants to be the second call once one of these offices picks a system,” he told Modus.
Arch, a software firm that raised a $52 million Series B round last year and is used by family offices and institutions to manage their alternative investments, has been investing in its operations to speed up client onboarding. Newly formed family offices are a meaningful part of growth strategy, Ryan Eisenman, co-founder and CEO of Arch, told Modus, and his firm plans to capitalize on this opportunity.
“We’re leaning into it deliberately,” Eisenman said. “That shapes some of our go-to-market approach, including how and where we market to reach that audience early.”
Accounting software startup Asseta, which raised a $4.2 million seed round of funding last year, is also investing in its go-to-market strategy. “A wave of new SFOs is a rare opportunity, and we intend to be the obvious first call. We're growing the team accordingly,” Dean Palmiter, a co-founder of Asseta, told Modus.
David Sawyer, CEO and co-founder of Unlimited.ai, a software startup that family offices and wealth managers use to manage their private investment portfolios, said his company has expanded its digital marketing. His company is young, but Sawyer believes the family offices of these highly technical professionals will gravitate towards a new, AI-native software.
Kartik Srinivasan, president of Advyzon, a platform that offers a unified variety of software for family offices and wealth managers, agreed with Sawyer and others that the employees of AI companies—whether they are standing up a family office, a multifamily office, or working with a wealth manager—are going to have higher expectations for software.
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“This is the reckoning for our category. Because of their backgrounds, these buyers are not going to trust claims about AI without two things: transparency about privacy and security, and concrete proof that the product does what the company says. That is the new bar: your AI has to be better than what an Anthropic engineer can build on their day off,” Jay McNamara, CEO at Masttro, said.
The surge is a fortuitous growth opportunity for the software companies, but it has raised the stakes for the venture- and private-equity-backed software companies.
The family offices choosing software “have to be really careful now because it's go time. It's make or break. What are [software companies] going to be promising? What are they going to be doing? What these guys are selling us?” said Erin Hulse, the founder of Deviate Consulting, a software consultant to single-family offices.
Consultants say new software companies targeting family offices are starting all the time. Venture capital firms have only recently accepted it as a vertical, Sawyer, of Unlimited.ai, said.
Like other startup categories, most won’t ultimately survive, Hulse noted. Even with a surge, there aren’t enough family-office clients for everyone.
“The stakes are higher across the board, for both PE-backed and non-PE- backed firms. I think the key difference is that PE-backed firms usually operate with a shorter leash and need to keep pace with specific benchmarks and KPIs set by the GPs. Any missteps on those growth curves will be met with more scrutiny,” Thomas Nicholson, vice president of North America at Aleta, a performance reporting software firm, told Modus.
No one is more aware of that than the founders who have raised that capital.
Eisenman told Modus: “The surge creates urgency: you need to be visible, fast, and credible right now, while they’re making foundational vendor decisions. The companies that move decisively in the next 12-18 months will establish relationships that compound for years. The ones that hesitate will watch that window close.”
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