Web3 Investment Guide: How to Allocate Encryption Assets through Family Offices?

In recent years, family offices have gradually transformed from "exclusive asset managers" for the elite circle to "asset governance control panels" 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 starting to consider: Is it suitable for them to participate in these areas through family offices? How should they build an appropriate structure? In the face of the high volatility and complexity of the encryption world, how should they set investment strategies and allocation paths?

This article will explore from a practical perspective how family offices are established, utilized, and optimized as an investment pathway, aiming to answer the following three key questions:

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

Who is suitable for a family office?

Not everyone needs a family office, as its essence is to serve "manage complexity". If your assets are relatively concentrated, trading frequency is low, and investment paths are simple (such as fixed income products, real estate, domestic funds, etc.), then the management capabilities of a family office may far exceed your needs, leading to structural bloating and increased costs.

However, for the following groups of people, family offices are almost the only option that can simultaneously balance security, structure, and growth.

1. Large and complex asset scale: Investable assets exceed ten million RMB, spanning 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 overseas immigration, offshore company establishment, non-Chinese tax resident status, as well as overseas investment, identity planning, distribution of family members, and other situations.

3. Preference for structured product investments: In the Web3 field, new structured products such as fund-type Tokens, convertible bonds, income certificates, and tokenized equity are increasingly being opened only to "qualified investors" or legal entities.

4. Need for long-term asset management capabilities: Hope to serve intergenerational inheritance and continuation of family intentions through asset allocation, or allocate long-term assets such as RWA that require "construction period + operation period + exit period."

The common characteristic of these groups is that their assets are not aimed at pursuing short-term gains, but rather to withstand economic cycles; their investments are not merely speculative actions, but rather structural participation. In this case, the management structure of family offices is no longer just a symbol of status, but a practical tool.

How to Build a Practical Family Office?

The structure of a family office is not one-size-fits-all; its core task is to solve practical problems. Many people mistakenly believe that establishing a family office is simply about purchasing a set of services from a trust company, law firm, or professional FO company. However, a truly effective family office must be tailored around the family's structure, asset portfolio, and investment objectives.

In the context of Web3, a practical family office needs to address at least the following four aspects:

1. Clearly establish purpose

Are you doing it for tax optimization, cross-border identity configuration, or to obtain project investment qualifications? Or is it to configure a set of encryption asset portfolios for the next generation? Clarifying the purpose is the starting point for structural design and resource allocation.

2. Choose the appropriate type

• SFO (Single Family Office): Suitable for families 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): Suitable for families with funds around 10 million RMB, considering cooperation with professional service institutions to provide management, compliance, investment research, and other services.
• VFO (Virtual Family Office): Suitable for families with insufficient funds to establish independently, it can achieve lightweight operation through an outsourced network formed by law firms, trust institutions, and financial advisors.
• Cross-border SFO: commonly used to address identity, tax, and investment channel issues, it is currently the most common choice for Chinese families.

3. Architecture and Legal Design

A typical family office structure usually includes:

• Offshore holding entities (such as BVI/Cayman/SPV) for holding and investment.
• Trust or fund structure for tax optimization and inheritance arrangements.
• Legal advisors and compliance teams for ongoing monitoring and adjustments.
• "Investment Carrier Account" integrated with Web3 projects, such as enterprise-level wallets, dedicated custody accounts, etc.

4. Configure professional resources

It's not just about having funds to set up a family office. It also requires matching roles such as legal, tax, financial, and technical advisors to ensure that the structure operates in compliance and that investments are executed smoothly. Many family offices choose to establish entities in Singapore while setting up financial collaboration teams domestically, forming a model of "internal and external linkage."

How Family Offices Can Participate in Web3 Investments?

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

Web3 investment is 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 beneficiaries: Establish a trust to hold Tokens or equity through a family office for tax optimization and intergenerational planning.

It is recommended that family offices cooperate with law firms and compliance institutions to establish identity based on the legal system of the project's location, in order to avoid missing investment opportunities due to "ineligible 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, income certificates, etc.
• Equity-like assets: such as convertible bond tokens, dividend tokens, DAO governance tokens, etc.

It is not recommended to participate in purely speculative projects that have "no real asset support, no governance structure, and no exit mechanism" in large proportions.

set investment rhythm and risk management mechanisms

The biggest difference between Web3 investment and traditional PE/VC is the uncertainty of 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 to release funds based on the project's progress.
• Configure the "Yield Reinvestment" pool to increase investment in quality projects.
• Clarify the tax reporting rhythm and establish reporting and auditing mechanisms.

Governance participation and deep collaboration

High-level family offices are 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 by staking tokens and configuring a "strategy wallet" for voting.
• In on-chain protocols, family offices can be embedded in collaboration 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 informational advantages and reinvestment opportunities.

Common Misunderstandings and Suggestions

At a time when Web3 is entering deeper waters, the key to investment is no longer "whether to invest", but "in what identity and in what manner to invest". Family offices are a structural carrier capable of supporting long-term governance capabilities, legal identity allocation, and asset flow pathways. They enable investors to not only become bettors but also to become structural designers, governance participants, and value depositors.

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

1. Treat the family office as a shell: only establish a company without a compliance path, financial flow, or tax disclosure, making it ultimately difficult to gain recognition from banks and regulatory bodies.

2. Lack of investment governance capability: Only establishing a legal entity account without a budget and redistribution mechanism leads to investments being unable to be effectively tracked and adjusted.

3. Blindly pursuing profits while ignoring compliance boundaries: Participating in "unlicensed dividend projects" may result in fund freezes or fines once regulatory intervention occurs.

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

• Annual Investment Plan and Analysis Review
• Clear compliance review and audit mechanisms
• Professional team equipped with ongoing legal advisory support

Finally, it should be emphasized that family offices are not suitable for everyone. They need to match the scale of funds, long-term willingness, and collaborative resources to truly be effective. The key consideration in determining whether to take the family office path is not "Do I have enough capital?" but rather "Do I need a structure to undertake cross-cycle governance tasks?"

If the answer is affirmative, then the family office is not only a container of wealth but also a long-term base for entering structural investments in Web3.