8 ms·

The asset managers you mentioned (especially T. Rowe, Fidelity, BlackRock, Wellington) are huge and have a lot of different products which have different mandat

The asset managers you mentioned (especially T. Rowe, Fidelity, BlackRock, Wellington) are huge and have a lot of different products which have different mandates, time horizons, client agreements etc. I am not going to dig through all the announcements, but it is unlikely that a large chunk of the capital from the asset managers I listed above is from hedge fund products at those companies. Most of the capital is likely coming from their PE arms or mutual funds that are allowed to invest a certain percentage of their portfolio in illiquid securities. There is a possibility that the money is coming from hedge fund products or other short-term investment horizon products, but it is not likely.

xenophon 11y ago
That's a great point and definitely something I oversimplified -- perhaps the "structural" factors of time horizon aren't a significant influence on the liquidity-seeking behavior of these investors. But I'd stand by the theory that (1) there is a difference in motivation and mindset between a growth investor domiciled with a firm that primarily trades in extremely liquid, public equities and a traditional growth investor with a sole focus on venture, and (2) that mindset manifests itself in the guidance coming from that member of the board. Again, this might be a good thing. I think many companies could use more discipline around focusing on profitable revenue vs. top-line growth alone. The point I'm trying to make is that the kind of investor/board member you have definitely changes your decisions as an entrepreneur -- and as non-traditional growth equity pours into tech, decision-making starts to change in a big way.
- xchaotic 11y ago
  I think we'd need some proof that the behaviour focused on cashing out in the short term is good for anybody but the investor. Y Combinator 'growth fund' on the other hand, is a good idea if it is what I think it is. It addresses a thing called 'death vallye' for the companies who have done their angel, seed A funding are still of a fairly small size and need support to grow big.

xenophon 11y ago

That's a great point and definitely something I oversimplified -- perhaps the "structural" factors of time horizon aren't a significant influence on the liquidity-seeking behavior of these investors. But I'd stand by the theory that (1) there is a difference in motivation and mindset between a growth investor domiciled with a firm that primarily trades in extremely liquid, public equities and a traditional growth investor with a sole focus on venture, and (2) that mindset manifests itself in the guidance coming from that member of the board. Again, this might be a good thing. I think many companies could use more discipline around focusing on profitable revenue vs. top-line growth alone. The point I'm trying to make is that the kind of investor/board member you have definitely changes your decisions as an entrepreneur -- and as non-traditional growth equity pours into tech, decision-making starts to change in a big way.

xchaotic 11y ago
I think we'd need some proof that the behaviour focused on cashing out in the short term is good for anybody but the investor. Y Combinator 'growth fund' on the other hand, is a good idea if it is what I think it is. It addresses a thing called 'death vallye' for the companies who have done their angel, seed A funding are still of a fairly small size and need support to grow big.