Web3 Investment Guide: How Family Offices Allocate Encryption Assets

In recent years, family offices have gradually transformed from "exclusive asset managers" in elite circles to "asset governance control panels" in the eyes of high-net-worth individuals. Especially with the rise of emerging investment fields such as Web3 and RWA, more and more investors are starting to think: Is it suitable to participate in these investments through family offices? How to build an appropriate structure? Faced with the high volatility and complexity of the encryption world, how should investment strategies and allocation paths be set?

This article will delve into how family offices are established, utilized, and optimized as an investment pathway from a practical perspective, focusing on answering the following three questions:

1. Who is suitable for entering Web3 through the family office path?
2. How to build a practical family office structure?
3. How should family offices develop and implement Web3 investment strategies?

Who is suitable for the "family office path"?

Not everyone needs to set up a family office, as its core value lies in managing complex asset structures. 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 actual needs, potentially leading to an unwieldy structure and increased costs.

However, if you belong to the following categories of people, family offices may be the only option that balances security, structure, and growth.

1. Large and complex asset scale: investable assets exceed ten million RMB, involving diversified investments such as equity, real estate, overseas funds, and digital assets, which may also include different currencies, accounts, and holding entities.

2. There is a demand for cross-border architecture: including but not limited to overseas immigration, offshore company establishment, non-Chinese tax resident status, as well as overseas investment, identity planning, family member distribution, and other scenarios.

3. Tendency to invest in structured products: Fund-type Tokens, convertible bonds, income certificates, tokenized equity, and other new structured products in the Web3 field are increasingly open only to "qualified investors" or corporate entities.

4. The need for long-term asset governance capabilities: hoping to achieve intergenerational inheritance and continuation of family will through asset allocation, or to participate in asset classes such as RWA that require long-term investment cycles.

The common characteristic of these groups is that their asset management goals are not to pursue short-term gains, but to focus on navigating through economic cycles; their investment strategies are not about single-point speculation, but about structurally participating in the market. In this context, the governance structure of family offices is no longer just an identity label, but has become a practical asset management tool.

Building a Practical Family Office: Key Considerations

The structural design of a family office is not a one-size-fits-all standardized process. Its core task is to solve practical problems. Many people's understanding of family offices is limited to purchasing service packages from trust companies, law firms, or professional FO companies. However, a truly effective family office must be tailored to the specific family 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 the purpose

Are you looking to optimize your tax structure and allocate cross-border identities? Or are you seeking investment qualifications for specific projects? Or is it to plan a portfolio of encryption assets for the next generation? Clearly defining your purpose is the starting point for structural design and resource allocation.

2. Choose the appropriate organizational form

• SFO (Single Family Office): Suitable for families with a capital scale of over 30 million RMB, considering the establishment of an independent team with autonomous operational capabilities.
• MFO (Multi-Family Office): Suitable for families with a fund size of around 10 million RMB, which can collaborate with professional service institutions to provide management, compliance, investment research, and other services.
• VFO (Virtual Family Office): Suitable for families with smaller capital scale, it can achieve lightweight operations through an outsourced network composed of law firms, trust institutions, and financial advisors.
• Cross-border SFO (such as setting up in Singapore): commonly used to address identity, tax, and investment channel issues, and 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 team for ongoing supervision and adjustments.
• "Investment vehicle accounts" that interface with Web3 projects, such as enterprise-level wallets, dedicated custody accounts, etc.

4. Professional Resource Allocation

Successfully operating a family office requires not only capital but also the deployment of legal, tax, financial, technical consultants, and other professionals to ensure compliance in structure and smooth execution of investments. Many family offices choose to establish entities in Singapore while setting up financial collaboration teams domestically, forming an "internal-external linkage" operational model.

Three Core Levels of Family Offices

The construction of a family office can be roughly divided into three levels:

Layer One: Identity and Structural Framework

• Clarify tax residency status, family member structure, and inheritance paths.
• 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 credential" for all Web3 investment activities. Especially when participating in overseas RWA projects, lacking this structure is equivalent to losing the investment channel.

Second Layer: Governance Mechanism and Authorization System

• Establish a family governance mechanism (such as an investment committee, will, equity agreement).
• Establish an internal and external consulting system (division of roles such as legal, tax, investment, management, etc.).
• Establish authorization mechanisms and supervision processes to ensure that "someone is responsible, someone executes, and someone corrects."

This layer determines whether the family office is "operational". If all decisions rely on individuals, the family office may become ineffective once an unexpected event occurs or if someone exits.

Third Layer: Asset Allocation Strategy

• Set long-term allocation ratios (e.g., RWA 40%, VC 30%, digital assets 10%, cash and liquidity 20%).
• Match the lifecycle rhythms of various assets (construction period, lock-up period, exit period).
• Set up profit-taking and stop-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 talk about "participating in Web3 through family offices", it is not just about switching accounts to invest in projects, but about redefining your role, path, and strategy. Clarifying the structure is just 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 onboarding identity usually includes:

• Direct legal person (company): Offshore company established by SFO to connect investment agreement.
• SPV Holding: Holding assets through a third-party SPV and controlling voting rights.
• Trust beneficiaries: Establish trusts through family offices 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 identities 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 office allocation include:

• RWA (Real World Assets): such as tokenized bonds, real estate, income sharing agreements, etc.
• Structured funds: such as yield Tokens, re-staking protocols, yield certificates, etc.
• Equity-type 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 backing, no governance structure, and no exit mechanism" in large proportions.

Set investment rhythm and risk management mechanism

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 to release funds based on project progress.
• Configure the "Yield Reinvestment" pool to increase investment in high-quality projects.
• Clarify the tax declaration rhythm and establish reporting and auditing mechanisms.

Governance Participation and Deep Collaboration

High-level family offices are not just investors, but can also:

• Act as an auditor, governance representative, custodian, and other roles in the RWA project.
• Participate in governance through token staking in the DAO and configure the "strategy wallet" for voting.
• Embed collaborative processes as long-term LPs, delegators, and ecosystem collaborators in the on-chain protocol.

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 Pitfall Avoidance Suggestions

As Web3 enters the deep water zone, the key to investing is no longer "can it be invested" but rather "in what identity and in what way to invest."

A family office is a structural vehicle that can carry long-term governance capabilities, legal identity configuration, and asset flow paths. It allows investors to be not only bettors but also structural designers, governance participants, and value preservers.

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

Misconception 1: Viewing family offices as a disguise

Establishing a company without a compliance path, financial flow, or tax disclosure will ultimately make it difficult to gain recognition from banks and regulators.

Misconception 2: Lack of investment governance capability

Only establish a legal entity account, but without a budget and redistribution mechanism, the final investment cannot be effectively tracked and adjusted.

Misconception 3: Blindly pursuing profits while ignoring compliance boundaries

Participating in "unlicensed dividend-type projects" may lead to fund freezes or fines once regulatory authorities intervene.

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

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

At the same time, it is reiterated that family offices are not suitable for everyone. They require alignment of capital scale, long-term investment willingness, and collaborative resources to truly be effective.

Whether to choose the family office path is not primarily about "do I have enough funds," but rather about "do I need a structure to undertake governance tasks across cycles?"

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