Samir Kaji, Allocate
Samir Kaji is co-founder and CEO of Allocate, a digital investment platform that provides access to top-tier venture funds and co-investments with a minimum contribution of $100,000. Kaji founded Allocate last year after 22 years working in venture banking with Silicon Valley Bank and First Republic Bank.
What’s your background working with family offices?
I started working with startups and venture firms at Silicon Valley Bank, before joining First Republic, where I led a group working with VC funds, startups, private equity funds and our wealth management group. I built a group that was a bridge between the family-office sector and the world of private funds.
Why did you start Allocate?
Many family offices want to invest in funds, but they don’t have a great way to do it because the world of venture capital is incredibly insulated, and breaking into it is difficult. Often, family offices were forced into writing much larger checks than they want to access specific funds. The administrative part is incredibly cumbersome, tracking portfolios with quarterly reporting from 10 different portals. There’s no way to see how much exposure you have to a company or sector.
How does Allocate address those pain points?
They can invest much smaller amounts because we aggregate capital. If you go to Andreessen Horowitz, access is limited, and the minimum investment is $25 million. Even for a large family office, that’s a big number if you want to create a diversified portfolio. Through our platform, someone can invest as little as $100,000 and get access to that same fund. We find fund managers, vet them with institutional rigor and bring them on the platform.
What trends are you seeing in family-office investing, beyond demand for direct deal flow?
The people that are taking over generational wealth are in their 20s, 30s and 40s and have grown up in a digital world. They want to create their own legacies. Some of them are creating a family-office venture fund.
There used to be a trend line where you started investing in a fund of funds, then in individual funds, then you start to co-invest, then you sourced your own deal flow. Over the last 10 years, people have almost started with sourcing their own deal flow. Unfortunately, in the last few years, many of those deals weren't institutional-grade.
What are the biggest mistakes you see family offices or individuals make when investing directly or considering raising their own funds?
View it as an apprentice model. It’s hard to access great companies and entrepreneurs, to build pattern recognition and portfolios. The mistake we see is people entering without going through an educational process, which is necessary to be successful. People jump in, and they like every single deal.
In order to build a great portfolio, you need to understand what it takes to build the right models to invest in the right type of companies. Think through what networks you need to take away the risk of adverse selection, and then create your own value-add. Seek whatever your asymmetric value-add is and double down on that. if I’m in real estate, I can add interesting value to a real estate fund, real estate tech fund or a property tech company.
What advice do you have for family offices that want to raise their own funds?
Many people think this is an easy asset category to get right, and it’s the hardest. I’ve seen what goes wrong with even the best firms. Start with funds, then co-invest and then begin direct investing once you have a good grasp. Finally, if you raise your own fund after you’ve dabbled in direct investing with some success, build a track record; because once you’re asking for somebody else’s money and taking the role of a fiduciary, that’s a whole new responsibility set.
Amy Guttman, who conducted this interview, has been covering entrepreneurs and startups since 2014. She contributes to Forbes and has been a correspondent for the PBS Newshour, BBC, Associated Press, CBS News and others. Amy is a podcast presenter and regularly participates in tech summits around the world conducting fireside interviews, moderating panel discussions and speaking about how to tell compelling stories.