Scott Shleifer on private investing
From Where VC Flows From Here with Scott Shleifer of Tiger Global & Hani Enaya of Sanabil - #FII6 - Day 2 · · FIIInstitute
“The second idea was to look for private companies so you could buy bigger stakes for a smaller amount of money, and the third was to look globally — our first investments we started researching were based in China and over the years we looked at companies in Russia, Latin America, India and Southeast Asia.”
On , Scott Shleifer, Partner at Tiger Global, spoke about private investing during Where VC Flows From Here with Scott Shleifer of Tiger Global & Hani Enaya of Sanabil - #FII6 - Day 2 on FIIInstitute.
About Scott Shleifer
Scott Shleifer, a partner at Tiger Global Management, spoke at the 6th Edition of the Future Investment Initiative (FII) in October 2022. He attributed the firm's success to being early to identify internet companies as strong investments due to their potential for high growth, high incremental profit margins, and low multiples of net profits when found early. Shleifer said the firm also looked for private companies to buy larger stakes and invested globally, with initial research focused on China before expanding to other regions. He noted that the firm looks for low penetration opportunities in large markets, and that once penetration hits 10%, it becomes more difficult to find such opportunities. Shleifer stated that Tiger Global owns two to four percent of six of the seven most valuable private internet companies, including ByteDance, Shein, Stripe, Flipkart, Databricks, and Canva, though he acknowledged a mistake on Canva. He described the current market environment as one where the cost of capital is up and companies are adjusting expense bases to avoid needing to raise capital. Shleifer characterized the Saudi region as a thriving ecosystem with innovation in software, fintech, and consumer internet, citing the acquisition of Souq by Amazon as an early success. He also said that several private internet companies generate more than a billion dollars in net profit and that the hallmark of great internet companies is having mostly fixed expenses, which leads to a healthier environment where capital is respected.