Investors have long invested in other investors as a way to get exposure to smaller, ambitious funds quickly (and access lucrative deals before their neighbors notice). . Andreessen Horowitz has been doing that for years, most recently put money into the art fund NFTalong with Lightspeed and Sequoia, there are now popular scouting programs that provide initial capital to aspiring emerging investors.
While the fund not a new strategy, it is the company that is gaining a lot of attention in the declining end-stage market and is rushing back to the best seed producers available. The recent efforts of Tiger Global Management and Seven Seven Six – the venture capital arm of Alexis Ohanian and Katelin Holloway – show just how much attention is being paid to emerging fund managers.
For starters, The Information reported this week that hedge funds Tiger Global Management is allocating $1 billion to early-stage tech funds. The fund, the story reports, has backed companies including Better Tomorrow Ventures, raised $225 millionMoxie Ventures, raised $85 million for Fund IIand Chapter One Ventures, which recently launched an accelerator program from $40 million in fundraising.
Days later, 776 announced the Titans Fund, an investment vehicle and accelerator that hopes to help emerging fund managers set up their own independent investment firms. Besides providing working capital, the fund wants to help aspiring investors with advice on how to execute their theses. Investors will also have access to Cerebro, 776’s software tool that connects portfolio companies with a searchable database of more than 40,000 contacts.
The relationship between Tiger Global and 776 is that both investment firms want early-stage exposure, and instead of doing it themselves, they can rely on test investors to mitigate risk and even even leading the first tests. Sure enough, just a few months ago, Bain Capital announced a $1.3 billion fund to support younger companies and startups, helping the company support diverse founders, and gives its existing limited partners newer opportunities to seed.
The growth of mutual funds stems from another growing trend: a growing interest in systematizing the investment world. In the past, there was an informal handshake to jointly invest and transfer flows. Now, in a world where scouts can only start a revolving fund and emerging managers can rely on the community to win deals, companies need to put their money in position. their cooperation.