Venture Capital’s ‘Yikes Moment’

Welcome to Dealmaker, my new weekly column on venture capital deals and the people behind them, where I’ll tell readers where the money is headed next, as well as who’s winning—and losing—in the chase to back the next generation-defining startup.

Since I joined The Information three years ago, I’ve been breaking news about the massive shift taking place in VC, as a wave of hedge funds, private equity firms and solo venture capitalists have shaken up the insular world of Silicon Valley. Now a stock market crash has tarnished the reputations and returns of these deep-pocketed investors. In future columns, I’ll tell readers who’s getting caught up in the fallout and who stands to gain.

Take the swell of recent high-profile departures from Tiger Global Management and Coatue Management. The two New York–based firms both raised monster funds and wrote hundreds of big checks at steep valuations during the pandemic-fueled startup VC boom. Then, stocks tanked, denting private valuations. Tiger downshifted to smaller funds and Coatue aggressively courted startups with structured deals, or investments with more investor protections.  

A personnel shakeout was only a matter of time. But traditional VC firms should avoid feeling too smug about signs of disarray at their rivals. They, too, may need to take a closer look at their top ranks.