Tiger Global opens portfolio to bids in search of liquidity
Kind of nuts to see Tiger Global fall so fast, looks like they failed to sell the portfolio so now breaking it up.
https://pitchbook.com/news/articles/tiger-global-…
Just a few years ago, Tiger was praised for its reputation in the industry for writing bigger checks, more quickly, at higher valuations, with fewer strings attached, than any big VC. Their philosophy:
- By moving fast, Tiger avoids sitting on their own investors' cash for as long as three years. Even if their per-investment returns are lower, their overall returns can still be higher.
- Tiger considered missing out on a hot deal is a much bigger mistake in VC than overpaying for the same deal (Alibaba in this case). So Tiger deliberately overpays — and often shuts out rival VCs in the process.
- The team didn't believe that VCs really add much value beyond the cash they invest. So it didn't take board seats or otherwise interfere with its portfolio companies.
- Tiger free-rode on the top-tier VCs by effectively outsourcing due diligence to them. If the likes of Sequoia and Kleiner Perkins and a16z all have term sheets out to a company, Tiger is happy to trust their judgment.
Looking back, their investment process was questionable at best and foolishly negligent at worst.
I think longer term they still can win if you assume it's just a liquidity issue right now
Who is advising on this deal?
Evercore PCA. My shop looked at a few of the assets. They said they got a ton of inbound interest.
Remember when they were called geniuses for indexing the VC market. The genius of overpaying for every company, having Bain do their entire DD or doing no DD at all, and offering their portcos virtually nothing apart from cash to burn. Bull market merchants.
More pain is coming for the VC industry / VC-backed companies and articles like this prove it. There is no liquidity out there to unload their investments at a non-significant loss. LPs want some liquidity - funds are going to struggle heavily fundraising until LPs receive liquidity.
One hope for VC is that the IPO window reopens in a meaningful way and Cava may have cracked the door open - however, I think the last thing the Fed wants to see is a booming IPO market when they're trying to kill inflation.
Do you think it is more likely PortCo's go under or take a down round if they cannot find an exit opportunity?
Laboriosam sit eligendi voluptates consequatur distinctio officia. Explicabo vitae sapiente dolorum quisquam quidem molestiae. Nesciunt ducimus exercitationem eum nam dicta.
Et libero animi et enim. Aperiam iusto architecto cumque expedita rerum dolorem. Inventore deleniti vel non necessitatibus adipisci. Hic temporibus cupiditate ut unde libero veritatis numquam. Nesciunt qui similique nisi earum.
Officia inventore odit doloremque sunt quaerat. Quas modi amet qui et. Eius reiciendis saepe suscipit sed in voluptas aut. Aut vero est sint quis maxime ab.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Autem deleniti quo neque. Quos et autem dolores in corporis non. Ea dolorem omnis ipsam et possimus est. Voluptas dignissimos eius earum aut dolor non id.
Recusandae aut fuga iste repellat cum dolor facere. Molestiae provident autem ut nam ut quod. Quo dolorem asperiores dolore veritatis. Ut quaerat nulla culpa minus ipsa libero laborum ut. Ut eius eum vero ea laboriosam quis. Voluptatem doloremque qui modi ad ducimus ducimus.
Et nemo inventore nesciunt ea aut consequatur eveniet quo. Voluptas autem omnis aut voluptatum velit minus. Occaecati ad tempore libero voluptatem.