Will speculative 'tourist' investors eventually exit venture capital?

Adam Besvinick · May 29, 2023

Crossover investors like Tiger and SoftBank have retreated from early-stage and returned to what they are actually good at

Seeing a Tiger name on a round announcement is now shocking, versus 2021 when they led seven deals in a single newsletter

34:06 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital

Marcelo Claure · Jul 31, 2023

The era of simply dumping capital into companies in exchange for access is over, and tourist capital has left Latin America

Capital is no longer free or readily available, so investors must actually build alongside founders

0:00 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Michael Eisenberg · Jun 19, 2024

A generation of venture funds will die — those raised during ZIRP — and it will take longer than people expect, but it is not a bad thing because the talent gets recycled into something better

Management fees keep coming so nobody wants to leave, but reality is now biting; like startups going out of business, the wind-down recycles talent

Scope: takes longer than people think

40:28 20VC: Foundation Models are the Fastest Depreciating Asset in History, Lina Kahn is a Threat to American Capitalism, PE is Not Coming to Save the M&A Market & How China Could Overtake the US in the AI Race with Michael Eisenberg

Mitchell Green · Mar 28, 2025

The tourists will eventually be washed out of venture capital, though the timing is unknowable and it may be a slow leak rather than a sudden event

Scope: timing uncertain; may play out slowly, like a slow hole in a canoe

70:44 20VC: Why Traditional VC is Broken: How VCs Learned Nothing from 2021 | Why LPs are More Important than Founders & Advice to Emerging Managers | Bull Case for Bytedance & Why TikTok's Ban Doesn't Matter with Mitchell Green, Lead Edge Capital

David Tisch · Feb 27, 2023

Tiger and Coatue are unfairly lumped in with tourists — they have invested in private tech companies consistently for a long time even though they changed model and velocity

Long track record of investing into private startups predates the boom

49:50 Tiger and coatue are unfairly labeled tourists given their long pre boom track record

Shu Nyatta · Jul 31, 2023

The withdrawal of foreign capital from LATAM is a balanced trade-off: underwater preference stacks from 2021 rounds make many companies nearly unfinanceable, but competition is lower and prices have become much more rational

If a company's fair valuation is below its 2021 round, buying secondary or common shares leaves you beneath a huge pref stack, so there is little to buy even at a discount

24:38 Tourist capital exit produces mixed effects pref stacks vs rational pricing

Marcelo Claure · Jul 31, 2023

The exit of tourist capital from LATAM is good and leaves a cleaner market for investors who actually understand the region

The people who showed up in late 2021 were following SoftBank like sheep and don't even know the capitals of these countries; a market left to a few committed players is better for both investors and entrepreneurs

25:10 Tourist capital exit is net positive for serious investors