In a recent Crain Currency op-ed, Alpha Partners’ Managing Partner Steve Brotman argues that one of venture capital’s most underappreciated tools, pro rata rights, could be the key to unlocking outsized returns for family offices. But, he cautions, only if used correctly.
At the heart of the piece is a simple insight: early access means little without the ability to follow on. For family offices that invest directly or through early-stage funds, the moment a company starts to scale is often when check sizes balloon, timelines compress, and stakes risk being diluted. As Brotman puts it, “The ability to add capital to a high-performing portfolio company is often what separates modest returns from outsized ones.”
But acting on these opportunities requires more than conviction. Brotman likens it to stepping into a professional sports arena without the training. “Trying to execute growth-stage venture deals without the right infrastructure is akin to stepping into a professional sports arena without training or a support system.”
That’s where partnerships come in. Many smaller VCs hold valuable pro rata rights but lack the capital to use them. By teaming up with firms like Alpha Partners—who specialize in surfacing and executing these rights—family offices can gain exposure to vetted, de-risked growth-stage companies without needing to build a venture team in-house.
It’s a strategy that’s highly selective, not a spray-and-pray approach. Brotman emphasizes that the best opportunities tend to arise in companies that are already post-product-market fit, with revenue traction, operational discipline, and clear paths to exit. He notes that while seed deals can take a decade or more to mature (and carry high failure risk), growth-stage opportunities offer shorter timelines and greater predictability, with some exiting in just 3-6 years.
Of course, not all follow-ons are worth pursuing. Brotman warns against inflated valuations and companies pivoting into unproven markets. Selectivity is everything, and the ability to say no is just as important as saying yes.
At Alpha Partners, we’ve built our model around this exact idea of identifying and activating pro rata rights in top-performing companies when the upside is clearest, and the risk is more contained. We work with family offices to give them a disciplined, informed path into growth-stage investing—one where they retain control, transparency, and alignment.
Because in this market, the smartest investors aren’t always the first in, they’re the ones who know when to double down.
Read the full op-ed here.
