http://www.bloomberg.com/news/articles/2016-03-24/hedge-funds-pull-back-in-silicon-valley-as-ipo-market-atrophies
In recent months, venture capital firms and mutual funds have
become choosier about which technology startups they’re prepared to
back. Now hedge funds, after helping push valuations to dot-com-era
heights, are getting more picky, too.
Last month, hedge funds participated in the fewest number of venture
capital rounds in U.S. tech companies since 2013, inking just two deals,
according to research firm PitchBook Data Inc. Even Tiger Global
Management LLC, an early backer of Facebook and LinkedIn with $20
billion under management, has pulled back. Smaller firms are getting out
altogether.
Like VCs, hedge funds are more circumspect because some
startups have failed to live up to their billing. Plus, in the wake of
several disappointing tech IPOs, many of the most promising firms are
choosing to stay private longer, meaning it takes longer to cash out.
Investors’ stinginess is forcing startups to cut costs, fire workers and
accept more stringent terms when raising money.
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