Venture Capital is being transformed by a sweeping wave initiated by a handful of so-called crossover funds, the most visible being Tiger Global. So far, traditional VC firms have behaved like the incumbents the startups they invest in disrupt. First, they dismissed Tiger’s strategy. Then, they condemned it. Now, they’re both afraid of it and wondering what to do to continue existing.
In this webinar, I cover the critical points you need to know to understand one of the major trends transforming Venture Capital:
- Why Tiger’s origin story explains their strategy
- How crossover funds exploit the Disruption playbook to break traditional Venture Capital
- Why VCs have reacted too late, and what they should do to adapt
The bottom line: Venture Capitalists need to overcome both institutional and mental obstacles to adapt to this lasting transformation of their trade.
I’ve worked in Private Equity & Venture Capital since 2006 and have witnessed first-hand many of the dynamics described here. The content of this webinar is based on my experience, interviews with Venture Capitalists worldwide, and the latest academic research.
Main Take-Aways
Here are the main points I tackle in the video (you can skip to each part by clicking on the white dots in the player):
- How Tiger and other crossover funds have taken a large slice of the late-stage VC market
- What is their secret sauce
- The argument on crossover funds disrupting VCs, using the framework of Christensen’s disruption theory
- Should VCs fight or flee?
- Are these crossover funds here to stay?
Sources & Additional Content
As you know if you are familiar with my training style, I like to bring in external confirmation on what I tell you. Here are the sources mentioned in the webinar.
Playing Different Games, by Everett Randle (2021)
“Smart idea, grounded on exhaustive research, followed by a big bet.” – Julian Robertson
What Is A Crossover Fund?, by Gilmartin Group (2018)
Crossover Funds, A New Venue for Private Equity, by Mark Anson (2001)
Tiger Global, Alkeon Slash Startup Valuations Amid Public Stock Selloff, on The Information (2022)
How Elite VC Firms Manage Portfolio Companies – The Dropbox Case Study, on our blog
Competing Again Luck with Professor Clayton Christensen, on ExcelinEd (2017)
Learn about Disruption at Harvard Online
What Founders expect from VCs, on our e-mentoring platform
Do VCs Take Enough Risks?, on our website
Disruptive Technologies: Catching the Wave, by Joseph Bower and Clayton Christensen, Harvard Business Review (1995) and the 2015 update: What Is Disruptive Innovation?, by Christensen et al.
20VC with Bill Gurley and Michael Eisenberg
“80% of Venture Capitalists Add Negative Value To Startups” – Vinod Khosla
“We wanted flying cars, instead we got 140 characters.” – Peter Thiel
I hope you enjoy this webinar.
Let me know in the Comments section below about other sources I should include, and what you thought about this video.
