Why is this important? The reason is to do with understanding the makeup of the venture ecosystem across all three asset classes - seed, venture and growth. Micro VCs are growing in importance in the first two. But the growth stage is also changing. In prior weeks we mentioned Tiger Global. This week Crunchbase published an overview of the fund, including the following from authors Gené Teare and Marlize Van Romburgh:
The 20-year-old New York-based investing firm — part hedge fund, part private equity investor — has not only quietly become the most prolific investor in billion-dollar startups, it is also significantly picking up the pace at which it deploys capital in 2021, according to our analysis.
How did the firm, now with an estimated $65 billion
in total assets under management, become one of the biggest startup investors in the world? And how does Tiger, which first began investing in private companies in China and India less than two decades ago, now routinely outmaneuver some of Silicon Valley’s most sophisticated venture investors?
With these questions in mind, we decided to take a closer look at the strategy and portfolio for Tiger Global, which Crunchbase data shows is investing in startups in 2021 at 10x the pace it did just a year ago.
The article is an excellent deep dive into understanding the firm and what it changes in the market.
My own fascination with this area is selfish. I believe that the seed stage of investing will become as much of a recognized asset class as the venture and growth stages. My stealth startup SignalRank Corporation is building data analytics and investment models that would allow it to invest in up to 200 of the best unicorn candidates in each three-year cohort of seed-funded companies. It is possible because of the excellence of the Micro VC funds themselves and their contribution to the creation of future value.
Just looking at the 175 unicorns that have reached the status in 2021, they did just over 1500 rounds of financing between them with an average of just over 3 investors per round. 304 Micro VCs invested in at least one of them. But only 30 invested in more than 4.
Here is the leaderboard of Micro VCs in 2021 unicorns with associated scores: