There has been a lot of talk lately about Tiger Global, the hedge fund widely considered as disrupting Venture Capital.
Founded as the 2001 Internet Bubble burst, Tiger Global – then known as Tiger Technology – was founded by Chase Coleman after his boss and mentor Julian Roberston closed his Tiger Management hedge fund in 2000.
Born in 1932, Robertson is often considered one of the first and most successful hedge fund managers. Started with only $8 million in 1980, his firm reached over $20 billion in Assets Under Management at the end of the 1990s. BusinessWeek ranked it the second-largest fund in the world in 1997. Somehow ironically, the same magazine ran an acid story on Robertson in 1996 titled “Fall of the Wizard of Wall Street”, which led to a lawsuit in defamation.
Coleman, who is today considered one of the most astute investors still active (with a personal fortune north of $10 billion), rarely misses an opportunity to quote his favorite “Julian-isms.” This week’s quote is one of them, and one cannot help but wonder if Tiger Global’s approach to VC investing is infused with this precept.
From the outside, it seems that Tiger Global is winning by “shooting from the hip”, like Clint Eastwood in 1960s Western movies. Ultra-light due diligence, sky-high valuations, and break-neck speed in closing deals are often the reproaches made by traditional VC firms about the cross-over firm.
Yet, Tiger Global’s Venture Capital investment strategy may follow Robertson’s rule: having identified a gap in the VC market, they are making a big bet by championing a new way of taking unicorn real estate.
Contrary to what many observers believe, Tiger Global is not new to the VC game. It started investing in private markets since the launch of its first dedicated fund in 2003. Over the years, Tiger Global took both early primary and secondary positions in huge financial successes such as Zynga, LinkedIn, Flipkart, Facebook, JD.com, Xiaomi, and Coinbase, to name a few.
No doubt such activity placed Coleman ideally to identify a market opportunity: Founders who want money fast, with minimum meddling from their investors. Late-stage VC investing is a fertile ground for such a capital deployment strategy: by that time, startups have a Board filled with smart investors and a proven roll-out plan. All they feel they need to succeed is money.
🗣 Do you agree with our analysis? What do you think of Tiger Global’s investment strategy?
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🔗 You can read a detailed commentary on Tiger Global’s strategy here, with more context on the cross-over trend here
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