FOUNDATION SERIES FOR FAMILY OFFICES · No. 3 of 5
How Much, and at What Pace
Sizing venture in a family-office portfolio — and the pacing discipline that decides whether the programme survives a bad year.
Pascal Bouvier, MiddleGame Ventures · June 2026
This is the third article in our series of articles directed at family offices. The first articles can be found here and the second here.
I first discussed the mechanics of a venture fund here, and the reasoning behind investing a funds here. I now focus on how one should think about venture as a program, a series of experiments.
You have decided that venture belongs in the portfolio, and that the way to own it is mostly through funds, with a deliberate direct and co-investment sleeve alongside. Good. Now comes the question that quietly undoes more family-office venture programs than poor manager selection ever does — not which fund, but how much, and at what pace. You can pick excellent managers and still build a poor program if the sizing is wrong and the rhythm is careless. This piece is about the rhythm, because it is the part nobody finds glamorous and everybody underestimates.
How much: start from the illiquidity budget, not a benchmark
The reflex is to ask what the right percentage is and to borrow a number from a famous endowment. That is the wrong place to start. The right question is narrower and more honest: how much capital can you genuinely lock away for a decade without needing to touch it? Venture is illiquid by construction — there is no redemption window — so the size of your allocation is really the size of your true long-horizon capital, not a figure copied from someone whose circumstances are not yours.
The endowment model, with its large private allocations, works because the institution has permanent capital and predictable spending. A family office often has permanent capital too — that is precisely its structural advantage — but only to the extent its horizon is genuinely generational and its near-term liquidity needs are met from elsewhere. Match the allocation to the real horizon, not the aspirational one. In practice many long-horizon families land in the high-single to low-double digits of the total portfolio for venture and growth specifically, with more in private markets broadly — but treat that as an observation, not a prescription, because the number is downstream of the liquidity budget, never the other way round. The worst sizing error is not committing too little. It is sizing to a target you cannot fund through a downturn.
Vintage diversification: one year is a bet, five is a programme
If you take one idea from this piece, take this one. The year a fund begins deploying — its vintage — heavily shapes the prices it pays going in and the exit window it meets coming out, and no one times that reliably. So you do not place a single large commitment in a single year. You commit steadily across years. One vintage is a bet on a market moment; a ladder of five or more vintages is a programme that no longer depends on any one moment.[1] The corollary is a discipline most investors fail: do not skip a vintage because the market feels expensive or frightening. The best vintages to enter are frequently the ones that felt worst at the time — capital committed into the wreckage of a downturn buys into lower valuations and exits into the recovery. Steady beats clever here, almost always.
Pacing to a target: why you commit more than you think
A single year’s commitment never equals a year’s worth of invested exposure, because capital is called slowly and returned later still. To reach and then hold a target level of venture exposure, you have to commit every year, and your cumulative commitments will run well above the exposure you are aiming for. Over time the programme becomes partly self-funding: distributions from your earlier funds help meet the capital calls on your newer ones. The mental shift is to stop thinking in terms of a one-time allocation and start thinking in terms of an annual commitment budget, sustained for years — that is what actually builds a venture book.
The J-curve and your cash-flow plan
Recall the J-curve from the first piece: a fund’s early years are a net cash outflow — calls and fees go out before any distributions come back. Plan that cash deliberately. Hold the capital you have committed but not yet been called in something liquid, and never put yourself in the position of funding a capital call by selling your public book at the worst possible moment. A venture programme needs its own liquidity plan; it should not quietly raid the rest of the portfolio whenever a drawdown notice arrives.
The trap: over-commitment and the denominator effect
Here is the expensive mistake, and even sophisticated institutions walk into it. Families over-commit on the comfortable assumption that distributions will keep rolling in to fund future calls. Then a downturn arrives. Exit markets freeze, distributions slow or stop, and — because public markets fall while private marks lag — the private share of the portfolio mechanically swells above target even though you did nothing to cause it. This is the denominator effect, and in 2022 it pushed many seasoned investors past their limits, forcing them to pause commitments or sell in the secondary market at a discount.[2] The defence is simple to state and requires real discipline to hold: size with a margin of safety, and stress-test a scenario in which distributions pause for two or three years while calls keep coming. If that scenario breaks you, you have committed too much — regardless of how good the funds are.
Re-up discipline: the returns are in the relationships
Venture is a relationship business, and access compounds. A great deal of the money is made by backing the same strong managers across successive funds, where your standing as a loyal, well-behaved LP earns you allocation and, often, co-investment. But re-upping cannot be automatic, or your budget simply fills with last cycle’s decisions. Build re-ups explicitly into the pacing plan: a manager you rate coming back to market is a claim on next year’s commitment budget, and you want to know that before they call. The discipline is to leave room to back your winners again while still seeding enough new relationships to keep the funnel alive. Loyalty pays in this asset class — but only if you have deliberately kept the capacity to be loyal.
What this means in practice
Sizing and pacing are the unglamorous half of venture, and they are where programmes are quietly won or lost. Choose a number you can fund through a bad year; commit across vintages rather than betting on one; plan the cash; keep a margin against the denominator effect; and protect the room to back your winners again. Do those five things and manager selection — which feels like the whole game — finally gets to matter, because the structure beneath it will hold. Once the rhythm is set, the question becomes where to point the capital. That is where this series turns next: why we believe European venture, and fintech within it, is where the asymmetry sits.
Next in the series: “Why European Venture — and Why Fintech Within It.”
[1]Pacing commitments across multiple vintage years reduces a portfolio’s dependence on any single market environment; skipping a vintage is a recognized strategic risk. See CAIS, “Pacing Commitments Across Private Equity Vintages,” and Commonfund, “Mind the Gap: The Strategic Risk of Skipping a Vintage.”
[2]The “denominator effect”: when public markets fall and private marks lag, private holdings rise as a share of the portfolio, pushing investors above target. In 2022 this left many institutions over-allocated, slowing new commitments and driving a wave of LP-led secondary sales. See CFA Institute, “The Era of the Private Equity Denominator Effect.”
