Tiger Global Management is a famous New York-based investment firm that invests in “private and public companies in the global internet, software, consumer, and payments industries.” Investors (i.e. its Limited Partner) in Tiger’s funds include pensions, foundations, endowments, and even its own employees. Coming from the world of hedge fund management, Tiger’s founders launched the business in 2001. Their expansion into private equity in 2003 initially focused on investment opportunities in Latin America, Russia, China, and India; they now invest aggressively in US opportunities.
Tiger Global has a huge amount of capital, unrivaled by few in the venture capital space. They have been known to approach early-stage companies, which haven’t even started fundraising, with offers of significant capital investment. Even in 2020, Tiger had a successful year despite the global pandemic and invested an amazing amount of cash in tech startups. In January, Tiger Global sent its investors a letter indicating its intent to raise $3.75 billion for its latest venture fund. Yet it ended up raising almost twice that amount. And in the first quarter of 2021, Tiger Global averaged four deals per week.
Tiger Global Recognizes Minority Tech Start-ups as a Potential Investment Trend
Tiger Global now wants to create a new $10 billion fund that would invest in minority technology start-ups. Tiger’s prior successes demonstrate its ability to identify investment trends and opportunities that lead to lucrative returns. This could signal that minority-owned tech companies are a valuable avenue for individual investors to explore as well.
As you create an investment strategy to maximize returns and minimize your taxes, consider purchasing shares in minority-owned small technology businesses when possible. Don’t forget that your qualified small business stock (QSBS) may be 50%, 75%, or 100% exempt from capital gains tax under certain conditions. Investment in QSBS is a savvy component to an overall financial plan. And an investment in minority technology start-ups could be a winning way to diversify your small business stock.
If you need specific guidance with QSBS, please contact us.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.