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.