The biggest development in my world this week (assuming we do not want to talk about the Russian massacre of innocents in Ukraine) is that Tiger Global partners Scott Shleifer and Chase Coleman announced that they were planning to put $1 billion of their own capital into Seed Funds as Limited Partners. $300 million or so every year.
But, in Om Malik’s world, it was the announcement of the new Apple Display. Once I read his piece I put my Apple XDR Display up for sale on eBay and ordered the new display plus the M1-Ultra version of the Apple Studio. I could not resist. And that is the thing about Apple. It is streets ahead and can reliably release new innovations every year that leaves you unwilling to resist. Read Om’s piece. It leads this week’s newsletter. And try to resist :-)
But back to seed funds. It is a very big deal that Tiger’s partners are investing in seed funds. A far smaller operation is also investing in Micro-VCs as they are also called. The seed stage of the venture value chain is fundamentally important. If anybody asks where Unicorns come from, they come from the best seed managers. And getting ahead of the game by being an investor in the best funds is very smart compared to fishing only at the B round or later.
On a personal note, this is close to what we did at ADV in 2016–20. Lee Straford, David Carr, Michael Dimelow, and the rest of the team set out to partner with the UK’s leading seed investors. We focused on twenty-one funds and invested as an LP in seven of them. We soon realized that LP investments were only a good plan B. Our product offerings to seed funds soon grew and the best performing product was able to grow far faster than the seed fund investments themselves and return more value to the fund managers than a simple LP investment would have done alone. I think Tiger may have 3–4 years of learning in this space before they arrive at their final offering for seed managers. But it is great that they are starting that learning process.
As for the rest of the venture space, it seems the organization of a DAO-like structure is being embraced by Bessemer Ventures and also by Bain Capital (but as an investor into them). This is the same week that Joe Biden announced a deep dive by the government into the role crypto might play for the US Dollar and Jack Dorsey predicted the end of the US Dollar as a reserve currency for the world, replaced not by China but by Bitcoin.
A lot to discuss in this week’s video