Lending Startup Backed By Benioff, Shopify Nears CEO AppointmentRead Now

Tiger Global founder Chase Coleman III. Photo: Bloomberg

Why Tiger Global Reneged on Commitments to Fund Other VC Firms

Photo: Tiger Global founder Chase Coleman III. Photo: Bloomberg

A year ago, leaders at Tiger Global Management committed $1 billion of their personal capital to back dozens of venture capital funds that invest in the youngest startups. It was an aggressive new effort meant to increase the hedge fund’s access to promising companies after the market for more mature tech startups—where most of its private investment dollars went—tanked.

But by last spring and summer, as the market for younger startups also deteriorated and Tiger’s startup investment returns turned negative, the firm’s partners called several of the managers of early-stage funds it had previously given verbal or written promises to and said it wanted to reduce those commitments, according to six people who discussed the deals with Tiger staff. Tiger employees often cited pushback from the firm's own backers, or limited partners, as the reason, according to three of those people.

Tiger’s change of heart damaged its reputation with some of the startup investors, which could make it harder for the firm to win startup deals in the future. The episode also showed how Tiger, which invested more money in startups than any other firm during the pandemic-fueled boom, appeared to come under pressure from its LPs as startup valuations began to fall. That’s notable, as LPs are likely to exert more power over VC fund managers during a period of poor investment returns.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
The Briefing google media/telecom
What Google’s AI Catch-Up Reveals
Google CEO Sundar Pichai. Photo by Bloomberg.
Google is finally waking up. After weeks of excitement coursing through tech about OpenAI’s ChatGPT chatbot, paired with news coverage of how Microsoft plans to incorporate it into products like Bing and Word, Google has made a move. The tech company once seen as a leader in artificial intelligence on Monday unveiled its version of a conversational AI service, which it calls Bard. Google said...
Latest Briefs
Pinterest’s Profit Plunges as Expenses Soar
Vox Media Raises $100 Million from Penske
Binance to Suspend U.S. Dollar Bank Transfers
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
The supplement stacks of 11 founders and investors. Photos courtesy of subjects.
The Big Read culture
The Supplement Stacks: All the Pills, Powders and Potions Filling Tech’s Kitchen Counters
When Courtney Reum wakes up in his Los Angeles home, it’s time to freeze, shake and dangle upside down.
Illustration by Getty Images.
Opinion venture capital
The Relationship Model Is Killing Venture Capital
The social and racial homogeneity of the venture capital industry has long been a source of frustration for entrepreneurs and investors alike.
Photos via Adept Labs, Edmund Hillary Fellowship, Gantry ML, KIT Gründerschmiede, Sci Founders, Shutterstock, Stanford University, University of Central Florida, UC Irvine, UC Berkeley and YouTube.
Exclusive ai
OpenAI Is Making Headlines. It’s Also Seeding Talent Across Silicon Valley
OpenAI has just 375 full-time employees, but its buzzy chatbot, ChatGPT, is shaking up Silicon Valley.
Verily headquarters in San Francisco. Photo by AP.
Exclusive google
Revenues Rise at Alphabet’s Biggest ‘Other Bet’ But So Do Losses
Verily, by far the biggest Alphabet unit by revenue after Google, continues to post heavy losses, according to previously undisclosed financial information.
Art by Clark Miller.
The 1:1 google
‘We Just Have to Keep Winning’: A Sonos Executive With a Colorful History Goes to War Against Google
A few months into his job as chief legal officer of Sonos, Eddie Lazarus was ready to wage war. When Lazarus joined the audio hardware company in late 2018, it was facing growing competition from tech giants like Amazon and Google.
Illustration by Clark Miller.
Opinion startups
Stop Paying People So Much
Every startup leadership team wrestles with the trade-offs between growth and profitability. This is fitting and ever shall be.