The AI gold rush is pulling private wealth into riskier, earlier bets | TechCrunch
About this article
On a recent episode of Equity, we talked to Arena Private Wealth to explore a growing trend: family offices bypassing VCs to gain direct exposure to AI startups, turning them from passive investors into active participants.
Loading the player… For decades, buying stock in a hot startup meant being allowed to invest in the funds run by the top VCs. But with the AI boom causing an investment frenzy, more family offices and private wealth are skipping the VC middlemen to get directly onto the cap table. “Companies are staying private longer, and there are fewer IPOs now than we’ve seen historically,” Mitch Stein, founder of Arena Private Wealth, an investment advisory firm for high-net-worth individuals, told TechCrunch on a recent episode of Equity. “A lot of money is being made well before companies go public, and right now the private markets are dominated by a lot of these AI names. The family offices who are allocating [directly into AI startups] are right on.” Arena recently co-led a $230 million round into AI chip startup Positron, an investment that earned the midwestern firm a board seat. Stein says that’s part of a deliberate shift away from being passive allocators and towards becoming “active participants in the capital markets.” The urgency amongst today’s family offices is real. “The world’s AI infrastructure is being built now, so you’re either going to get in early and have an opportunity to do more primary investing…and really build a portfolio, or you’re going to miss it and be taking random bets,” Ari Schottenstein, Arena’s head of alternatives, told TechCrunch. Stein put it more bluntly: “Your biggest risk is not having exposure to AI, not what could happen to your AI inves...
