Silicon Valley has been the center stage of venture capital and investment over the past few decades. As a iconic landmark of Silicon Valley, Sand Hill Road is where many top venture capital firms cluster. The VC investment landscape has been experiencing tectonic changes recently, with the arrival of gigantic funds like SoftBank Vision Fund and Tiger Global Management. This article analyzes Tiger Global’s transformative impact on the investment practices and culture in Silicon Valley, especially around the Sand Hill area, which fundamentally rewrites the rules of early stage investing. With its huge war chest, operation agility and investing rigor, Tiger Global has catalyzed the acceleration of deals, more methodical evaluation of startups, and formation of an effective early warning system, contrasting itself from tourist investors and leaving a far-reaching imprint in the VC sphere.
Tiger Global speeds up the deal flow with its operation agility
The pandemic has facilitated remote communication via video conferencing platforms, making investment talks much more efficient. Tiger Global is famous for its speed of closing deals – investment contracts can be signed within days. This is drastically different from the past practices that happen mostly offline and are time-consuming. Tiger Global’s agility has pressured other VC firms to catch up and accelerate their dealmaking pace. The common refrain in Silicon Valley now is that “things have never moved faster”. Major reasons include keeping up with the tempo of Tiger Global and fellow swift-moving investors from New York.
Tiger Global brings more rigor and methodology to startup evaluation
Despite not asking for board seats in its portfolio companies, Tiger Global has deep insights into their operations, thanks to an expanding toolkit of metrics to evaluate startup performance. It also established an early-warning system to identify promising targets based on regional signals. For example, the take-off of a new online service in one area may indicate ideal timing for investing in a similar firm elsewhere. Many traditional VC practices could enhance their methodology by learning from Tiger Global’s approach. The rigor and systematic methodology is one crucial reason that sets Tiger Global apart from tourist investors who lack the substantive understanding in this space.
The arrival of Tiger Global triggers changes in Sand Hill Road’s investment culture
The Sand Hill Road VC community was anxious about SoftBank’s aggressive investing style initially. In contrast, investors seem more receptive to Tiger Global’s presence. Despite competing for similar early-stage deals, many VC firms see Tiger Global as a force of good, providing startups much needed growth capital. Even if Tiger Global exits Silicon Valley in the future, its disciplinary impact on investment philosophy and culture will persist. Going forward, more systematic evaluation, formation of intelligence networks, higher investment tempo will likely become more prominent features of the Sand Hill Road ecosystem.
In conclusion, Tiger Global, with its huge war chest, operation agility and investing rigor, has transformed early-stage investing rules in Silicon Valley, especially around the Sand Hill Road area. Its impact on accelerating deals, applying more methodology in evaluating startups, and forming an intelligence network will outlast itself.