Fifty, Kim Clark, Kate discussed on The Information's 411
That amid the flurry of tech deals tiger has been the flurry. Est it's alpes. Sequoia capital recent horowitz and excel in the number of startup deals. It's done this year. But who is this quiet press-shy firm who is tiger. That's the subject of our first segment on today's episode of the four one one. I'm cory weinberg. And i'll be speaking to my colleague. Kim clark who just came out with a fascinating feature inside tagger goebbels deal machine. Kate spent time talking to founders. Nbc's about what makes the firm unique and what they're investing streak tells us about venture capital in twenty twenty one. Then we talked travel startups investing in trouble. Startups has been understandably week over the past year. But it's starting to turn the corner. Wendy pollock the information senior editor. And i will have a conversation about story. I wrote this week about what's going on with startups like saunder trip actions and hopper and we'll even talk a little bit about airbnb but first let's talk tiger global with venture capital reporter kit. Clark all right kate. You've just spent a bunch of time trying to understand. What has the impact been of this one. New york hedge fund tiger global management but their impact has been on startups in silicon valley. Why did you pursue the story. What what got you intrigued by by tiger. The reason i chose tiger was because they were leading rounds pretty much every day. I was getting an e mail in my inbox from you. Know someone that works. Npr saying are you interested in in writing company. They're announcing around. Tiger global is leading and i've heard of them for years of course they're not new as very clear in the story. They've been around for two decades But this year kind of you know the tail end of kobe. I guess you could say and amid covid. They were striking more deals than they had an in their history and this year in particular about four deals on average per week so so nearly every day so that to answer your question it was the sheer pace of deal making that got me so interested and the fact that these people that work at these firms have not really been written about they managed to deploy several billion dollars a year. Many many tens of billions of dollars a year and yet fly very much under the radar. So i thought there was a good opportunity to sort of discover who these people are and what they're interested in and how they manage to move so quickly despite being a really really really small team totally. Let's start with the people will go into like the pace but tigers not affirm that like some other attention grabbing. Vc firms They they aren't about big personalities. They're not about people you know they're not masayoshi said mark andriessen who of you know historically put themselves front and center who are these guys so the first led by this guy chase call men and his private equity unit. Co-founder scotch lifer. Who really calls the shots. When it comes venture capital deals he has the autonomy to make decisions and does and like i said. They've invested in over sixty companies in just a three or four month period. Twenty twenty one and then kind of reporting to him is this guy named john. Curtis who has only been tiger for about four years. And has you know led rounds and i think fifty or sixty companies in that timeframe many of which you would you would certainly have heard of data bricks and others that have generated a lot of headlines in the last few months and that is really the some of the team of people who have a lot of power firm who are calling the shots on deals there are others including other partners and analysts and data scientists who work in the private equity side. I think one of the biggest takeaways from me and something that really surprised me about this reporting was how small of a team it was and how somehow they're able to move like three or four times faster than a lot of the capital firms that we cover i think one of the most eye-opening examples in your story discovered a little bit of play when people tweeted about the piece It's not like tiger has an army of internal. They don't have an internal team that is like coaching startups on sort of what to do. They're like hiring bain consultants to do that. What is tigers edge is. It just is it. Money is a moving quickly. What has gotten in them into so many deals in. What makes them unique. yeah. I do think it's moving quickly. I do think that these partners that i mentioned of course have expertise that they that they do share. I would say generally and you just kind of hit on. This is that they don't spend a ton of time with their portfolio companies. I mean if you're a team of three or four or five people and you have a portfolio of say five hundred companies. You don't really have the ability to take board seats or to spend your evenings and weekends and afternoons on the phone with various ios in instead they spend a lot of their time pursuing new deals. I think edge is. They can write really big checks. They're very comfortable tie valuations. It's not something that trips them up like might a different more classical. Vc firm and they have a lot of expertise on navigating the public markets. If you're if you're pre ipo business looking for pre ipo round of capital you probably want to raise money from tiger Versus a traditional venture capital firm that focuses more on growing a business in say product market fit and go to market strategy. Those aren't really things that you're worried about your worried about. Who were my investors going to be a public company. And can i find investors. Now that might stick with me through my entire. Ipo process and actually several years beyond that po. They want those long-term holders k. That's what they always say exactly long-term and that's what they want. It's a that's the truth. And that is something that gives them an edge coupled with all these other things that we just talked talked about the last time that there was a venture capital firm or sort of generally like a private tech investing firm That was showing the spotlight or so in the news every day. And you mentioned the centerpiece. It was softbank the pace of deals that they had coming out of their one. Hundred billion dollar vision fund was insane and vc's kind of traditional vc's kind of derided softbank. You know kind of considered it dumb money. Sometimes they're returns been obviously quite good. Thanks to coupon an uber. And and some other bets but people. How do people feel about tiger. Are these guys super savvy of the super smart people skeptical of how faster investing when i started reporting on this. I did expect that. The investors that i spoke to who of course weren't affiliated tiger. I expected that they would not like tiger. I expected that they would. You know sort of insult them in the process and say they're stealing all of our deals. They don't care about valuation their irresponsible. They're just like softbank. And that's not what i found. I think a lot of investors do like working tiger and don't necessarily want to insult them because they mark up the value of their companies and not just not just not just more value but like they provide capital to companies that are very capital intensive. And who need to raise more money and who's investors may not want to be the ones writing them a five hundred million dollar check another five hundred billion dollar check like can do so. What i learned is that they have a lot of valuable relationships within venture capital. They really admire a lot of venture capitalists. I think there are you know. Of course i came across people who think they are way way way too. i guess. Insensitive toward valuations and our way too willing to pay up in such a way that is actually affecting the entire markets. And i think in a year or two or three will be able to see more clearly as we are now able to a- sopping sort of what. The impact of tigers increased pace. This year has been but for now. You can't really call them out and say oh you know you're you're being really responsible because it looks like on paper that they're doing an.