Investment Memorandum

I. OVERVIEW

Tiger Venture Capital Management (TVCM) was born on a simple observation: traditional venture capital strategy has stopped working for most investors, most founders, and most companies; so we built a different approach.

II. THE PROBLEM WITH THE TRADITIONAL VC MODEL

Traditional venture capital is structurally misaligned with the interests of the people it claims to serve — investors and founders alike.

For Investors

Returns depend entirely on IPO or acquisition events, yet 65% of portfolio companies fail to return even 1x invested capital, and only 4% reach 10x or more. The model is a lottery, built around a handful of outlier outcomes that become rarer as private markets mature and competition increases. Standard management fees of 2% annually allow fund managers to collect millions regardless of fund performance. These structural issues have led to the industry calling for more capital than it has distributed to investors for six consecutive years, meaning LPs have  paid more in fees than they have received  in returns.

When exits do occur, projected returns rarely match actual outcomes. This is because subsequent financing rounds dilute shares — median founder ownership falls from 56% post-seed to 23% by Series B, with early investor stakes following the same trajectory. Liquidation preferences and waterfall capital structures further erode returns before they reach investors. The carry structure increases misalignment: a 20% carry fee applies on exit, incentivizing fund managers to invest in companies they feel will yield the largest and quickest returns, with no focus on sustainable performance. With a fund that returns 1.5x on every investment generating no carry, and a fund that returns 10x on one company and zero on nine generating enormous carry, the structural incentive is to gamble.

The above has led to holding periods extending to a median of 14 years from founding to IPO in 2024, up from 8 years in the mid-1990s, as private capital has grown abundant enough to delay apublic listing decision indefinitely. The industry's attempted response — proliferating secondary markets, GP-led continuation funds, and public venture vehicles — isn’t solving the problem. Instead it transfers it, recycling capital between investors at negotiated valuations rather than generating real returns from underlying business performance, leavinginvestors without sustainable and significant returns.

For Founders

The exit model is equally destructive. Building toward an IPO or acquisition forces a company into artificial growth timelines, puts external pressure on strategic decisions, and leads to an eventual loss of the vision for creating the business in the first place.

Goldman Sachs CEO David Solomon, whose firm underwrites billions in IPOs annually, told founders directly: it is not enjoyable to be a public company, noting that companies can scale just as large and access plenty of capital in private markets without SEC  scrutiny, shareholder pressure, or high administrative costs. Private companies reallocate resources they would have spent on public listing and regulatory requirements toward continued innovation, growth, and business optimization.

Structural Exclusion of High-Impact Sectors

Beyond the structural problems for investors and founders, the exit-optimization model systematically excludes entire categories of valuable companies. There has been a large shift in focus of venture capital firms away from hardware  toward software and service businesses. Pharma, energy infrastructure, agricultural innovation, trade finance, advanced materials — these sectors produce some of the most essential and durable businesses in the world, but their cash flow profiles and commercialization timelines are structurally incompatible with the exit game. The result is a massive underserved market of high-impact innovations that never reach their potential because the available capital is structured for a different kind of company. Revenue and profit-share financing models are a solution, aligning incentives of founders and investors to build profitable, enduring, and steadily growing businesses without the pressure of growth-at-all-costs and high risk of failure.

III. THE TVCM MODEL

TVCM is designed to generate investor returns during the operating life of portfolio companies, independent of exits that may never occur.

Investments are structured around preferred equity and revenue-linked participation instruments, meaning from the moment portfolio companies generate revenue, investors receive quarterly cash distributions.  Preferred shares are non-dilutive — future capital raises for the portfolio company do not reduce investors' share of ownership percentage. Additionally, there is no waterfall distribution to erode investor proceeds.

Our fee structure reflects genuine alignment with investor interests. We charge 1% management fees versus the industry standard 2%, and 10% carried interest versus the standard 20%. As portfolio assets stabilize, the fund converts to a trust structure, permanently reducing fees to 0.5% and transitioning investors into long-duration annuity-style distributions without requiring a taxable liquidity event. Investors pay less as the fund performs better — the structural opposite of traditional VC.

For founders, our model is equally differentiated. Without the pressure of exit optimization, founders retain control over their vision and build companies designed to last decades, rather than companies designed to be sold. The absence of dilutive financing rounds and exit timelines allows management teams to make decisions in the long-term interest of the business, rather than for a short-term a liquidity event. Great companies — the ones that define industries and endure generations — are rarely built under exit pressure.

IV. COMPETITIVE ADVANTAGE: DFA AND THE LEAN TEAM MODEL

TVCM is operationally supported by David French & Associates (DFA), a global strategy and execution firm with 30+ years of experience across North America, Europe, and Asia. DFA embeds directly into portfolio companies with hands-on operational authority over strategy, management formation, regulatory positioning, financing architecture, and operating models. This is not passive equity, it’s private-equity-level operational control applied to early-stage companies, ensuring that capital is accompanied by  execution strategy capable of converting innovation into sustainable revenue.

DFA's network of 400+ academic, institutional, and technical experts provides TVCM with access to frontier research and pre-commercial innovations before they reach traditional venture channels. Critically, this network enables market validation before capital is deployed. We do not fund hope. We fund confirmed demand.

This operational model allows TVCM to remain intentionally lean. We do not maintain large analyst teams, expensive offices, or bloated internal structures. Every dollar of overhead saved is a dollar that goes to work in portfolio companies rather than sustaining the fund's own operations. Our 10% management fee reflects this discipline — lower because our cost structure demands less, not because we are offering less.

V. WHY NOW

The conditions that made traditional VC successful have fundamentally changed. The median age of companies going public has risen to 13 years since founding, up from 10 years in 2018, while the number of unicorns — private companies valued above $1 billion — has swelled to over 1,200. Exit markets are cyclical and increasingly limited. The secondary market has expanded to record volumes precisely because the underlying model is failing to generate liquidity through performance.

At the same time, institutional allocators and family offices are actively shifting toward yield-oriented private market strategies that generate realized distributions rather than paper IRR. The demand for what TVCM offers — predictable cash flow, operational involvement, non-exit-dependent returns — has never been stronger.

TVCM is structurally designed for the current environment. Not as a reaction to what is broken, but as the manifestation of what venture capital should have been doing all along: finding exceptional companies, building them properly, and ensuring that the people who believed in them early are rewarded while the companies are still thriving.