Many of Chase Coleman’s Tiger Global Management cubs were born by Tiger Global Management. These cubs do not always stay. Tiger Global, a venture capital and hedge fund firm, sent an earlier this week letter to investors acknowledging its severe losses in the public portfolio. It also stated that the firm’s private valuations had declined each month this year. Fortune read the letter. It stated that “This isn’t a year in which we will be proud of the scoreboard.” The firm announced that John Curtius was leaving, despite the company’s performance and hiring update. He was the firm’s most active venture capital investor and star software partner. According to two people familiar, Curtius, who joined Tiger as a software investment manager in 2017, will be leaving Tiger to start a new fund. According to one person, the new fund, called Cedar Investment Management, will support early-stage software companies in Series B to Series C rounds. For this story, Fortune spoke to four people who are close to the company. Curtius and Tiger Global spokeswoman refused to comment. ( The Information reported Curtius’ imminent departure.
The firm will feel a loss when Curtius leaves, especially as it plans on going back to the market to raise its next fund. Two sources familiar with Tiger’s fundraising plans said that Tiger will soon start raising money from LPs. A Tiger spokesperson declined to comment. The flagship fund of Tiger Global on the public side fell 50% in the first half of the year. By mid-August, many of the firm’s public positions had been cut or eliminated by the firm. According to the letter, the private portfolio fell in the last quarter. However, it is not clear how much.
“This market continues to be challenging for our strategy and we have tried our best to position our portfolio accordingly,” the letter states. It adds: “We believe that our portfolio positioning, exposures and allow us to remain patient, and play offense throughout this period in which material daily markets moves have been the norm, and valuations have fallen in our focus areas.”
According to someone familiar with the matter Curtius is responsible for 70% of Tiger’s private sector portfolio. He has also been a key figure in the sector by landing Tiger on term sheets of companies such as Databricks and Toast, SentinelOne and GitLab. PitchBook lists Curtius as having negotiated 111 Tiger’s deals. This compares to Scott Shleifer’s 54 and Griffin Schroeder’s 32. Curtius invests in both private and public consumer internet companies. Forbes places Curtius’ investments at 250.
According to two sources familiar with the matter, Curtius was recently given new responsibilities at the firm. He will be responsible for three of Tiger’s junior associates.
Although Curtius’ departure is a matter of great concern and may cause concern among Tiger’s limited partner, it’s not Tiger’s first rodeo. Lee Fixel was the head of the firm’s private equity business before Schleifer. He left Tiger to start Addition VC. Tiger partner Jason Schneider later joined him. After two years of fast-fire venture activity at Tiger, Fixel’s departure came before Tiger was the most active investor in the global private market. The firm also incorporated early stage investments as part of its strategy. Perhaps Fixel’s departure made it easier for investors like Shleifer or Curtius, to make a name for themselves.
According to Fortune , a founder of a portfolio firm backed by Curtius spoke out on condition of anonymity with Fortune . He said that Curtius’ departure would not have any major impact on the company as Tiger’s team remains large and has strong processes. According to an investor letter, Tiger has been building its venture capital business and hired several new employees, including a private equity associate at Hellman & Friedman, a growth investor at Apax Digital and two private equity associates at Blackstone. According to the investor letter, Tiger has proven to be a strong breeding ground of investors on both the private and public side of the market. Private partners don’t have as much autonomy while they are still with the company. According to two people familiar, only Chase Coleman, the founder of Tiger Global, and Shleifer can approve deals. Apart from this year, Tiger has a solid track record. In its first two decades of existence, Tiger Global had reported making an annualized 21% after taxes. But how much volatility are LPs capable of handling? We might find out from Tiger’s next fundraise. The letter was signed by Tiger’s management team. They wrote that they know there is a lot to be done to recover losses. “We are determined to do so and believe that our team and the investment process we have refined will allow us to do just that.
Canva keeps up with
Canva, a graphic design company, is currently valued somewhere between $26 billion and $40 billion. It’s the only startup that’s female-founded and women-led. My colleague Emma Hinchliffe explores the startup’s history, present and future. She also discusses how Melanie Perkins (cofounder and CEO) has become one the most prominent leaders in Australia. You can read the entire story here or go to Fortune‘s annual listing of most powerful women in business, hier.
The term sheets of funding rounds can have different terms. They will vary according to how much is at stake and who is involved. Generally, term sheets for seed rounds will be shorter and lighter than those for series A and beyond. As there is less at stake, it is better to make the process simpler. No one wants to spend unnecessary money on legal fees or waste time. A third-party funding portal can make the process much simpler.
The term sheet is typically provided by the investor in a seed round. This can change if there are multiple investors involved in larger or later rounds.
Common terms in a term sheet are:
Who is issuing the stock or note? Type of collateral being offered? Valuation, Amount being offered, Shares, Price, What happens to liquidation or an IPO? Voting rights, Board seats and Conversion options. Investors rights to information. Founders obligations. Who will pay legal expenses. Non-disclosure requirements. Rights for future investments. Signatures
One page may be all it takes to create a term sheet. Or, it might be 10 pages. Although founders prefer simplicity, it is important to be clear and ensure that all bases are covered.
When reviewing terms sheets from potential investors, founders should pay attention to:Convertible note terms and high-interest debt financing that could make you bankruptYou should not ask for too much of a controlling stake. This could suggest that you will be replaced Additional fundraising can be limited by terms Investors who only want a quick and hot exit and have no realistic expectations about the timelines of their exits
Investors might try to exhaust a founder who is eager to finish the deal. You should not panic if you notice this happening. While every provision on documents may not be clear at the moment, one of them could trigger in the future and cause you, your cofounders and other employees to lose their jobs.
Investors aren’t looking for a difficult board or greedy investors. Neither do founders. Both sides should win if the term sheet is in place. A rule of thumb is to expect a dilution of about 20% for each round of financing. This amount is not recommended. A start-up’s life span is very long. Even if you’re at the seed stage and feel comfortable giving up some equity, equity will not return to you. Without signatures, a term sheet is not an executed contract or a promise. Still, due diligence must be performed. Both sides can choose to walk away and it won’t affect their reputations.
You made your offer and they made theirs. Don’t be negative about the investor because you don’t like her terms. If she sends you a terms sheet, the next potential investor might be concerned about what you will say about her. Be mindful. Once you have reached an agreement, your word and reputation are the most important things you have. It’s all you have. The most common investing problem is when founders get a term sheet and believe the deal is complete. They begin increasing their expenses in the hope that the money will be transferred. There have been instances when a founder who had a term sheet failed to close the deal and the founder was forced to stop because it was assumed that the money was already there. Don’t be one of these people.
