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Financing Growth in Family Businesses: Insights and Strategies


Family businesses, which account for more than 70% of global GDP, face unique challenges in financing growth. Maintaining control and discretion is often a top priority, which can limit traditional financing options. This article explores insights from PwC's 2023 US Family Business Survey and KPMG's report on family business growth through individual investors, providing practical strategies for family business owners looking to secure financing while maintaining control and fostering long-term growth.

Key Findings from PwC's 2023 US Family Business Survey

Trust and Technology

  • Building Trust: Trust is critical for family businesses. While 78% believe it's essential for customers to trust their companies, only 52% think their customers fully trust them, and 44% believe their employees do. Sharing the company’s purpose and enhancing digital capabilities, including cybersecurity, can bridge this trust gap.

  • Digital Transformation: Only 39% of family businesses feel they have strong digital capabilities, down from 42% in 2021. Rapid technological adoption during the pandemic was beneficial, but continuous investment in digital transformation is essential to stay competitive.

Governance and Succession Planning

  • Governance Structures: Nearly all US family businesses have some form of governance policy, yet only 66% have a clear governance structure. Proper governance can embed trust and longevity, aligning business and family interests.

  • Succession Planning: Despite its importance, only 34% of family businesses have a robust succession plan. Effective succession planning ensures business continuity and protects the interests of both the family and the business.

Growth and Innovation

  • Innovation: Innovation is crucial for growth. However, only 19% of family businesses focus significantly on innovation, research, and development. Embracing an entrepreneurial mindset similar to the founders can drive long-term success.

  • Sustainability: ESG factors are becoming increasingly important. Yet, only 30% of family businesses agree that contributing to societal and environmental solutions is crucial for long-term goals.

Insights from KPMG's Report on Family Business Growth through Individual Investors

Financing Needs and Challenges

  • Maintaining Control: 76% of family businesses prefer to retain majority ownership. This emphasis on control can make it challenging to attract traditional financing, such as private equity or corporate strategic partners.

  • Alternative Financing: High-net-worth individuals (HNWIs) present a viable alternative, offering capital without demanding control. Nearly half of the surveyed family businesses have successfully raised financing from HNWIs, with 92% reporting a positive experience.

Attracting HNWI Investment

  • Alignment of Interests: HNWIs are typically patient investors with long-term horizons, aligning well with family businesses' goals. They also bring valuable expertise and industry knowledge.

  • Overcoming Barriers: Family businesses can attract HNWI investment by addressing concerns about potential interference and maintaining confidentiality. Transparent communication and demonstrating the value of family business investment can help bridge this gap.

Strategic Recommendations

  • Governance and Expertise: Family businesses should establish clear governance structures and consider including independent board members to bring in external expertise.

  • Equity and Control: While retaining control is essential, offering equity to the right investors can provide growth capital. Family businesses should communicate their willingness to consider equity under appropriate terms.

  • Partnerships and Integration: Exploring strategic partnerships and M&A opportunities with tech-savvy and sustainable businesses can accelerate growth and innovation.


Family businesses are positioned uniquely within the global economy, offering stability and long-term growth potential. By leveraging insights from PwC and KPMG, family business owners can navigate the complexities of financing growth while maintaining control. Building trust through enhanced digital capabilities, establishing robust governance, focusing on innovation, and exploring alternative financing options like HNWIs are key strategies for sustainable growth and continuity.

About Lennox Partners

Lennox Partners is dedicated to helping family and founder-run businesses achieve their growth objectives while maintaining their core values and control. We provide tailored advisory services to navigate the challenges and opportunities unique to family businesses, ensuring long-term success and legacy preservation. Contact us today to learn how we can support your business growth journey.

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