There’s a reason hedge funds like Tiger Global Management have moved aggressively into the venture capital market over the last few years: The gains from buying private shares in startups like Zoom, Coinbase or Affirm, even in the last rounds before a public listing, can be huge. That’s especially true when compared to the stocks’ performance after listing.
Pre–initial public offering investors in some of the best-performing stocks in recent years include Iconiq Capital, which has managed money for top tech executives including Meta Platforms CEO Mark Zuckerberg and Block CEO Jack Dorsey; Dragoneer Investment Group, a San Francisco public stock investor that also has backed numerous private tech firms, including Discord and Databricks; and Sequoia Capital, a fixture of Silicon Valley VC investing. Gains from backing startups in their final rounds should buffer recent drops in their public stock, assuming they hung onto the shares.
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