More hedge funds — which once were perceived to shun investments in fledgling companies — are increasingly throwing their weight behind early-stage businesses, TechCrunch reports.
One reason is that startups are waiting longer to go public, providing hedge funds with more potential to rake in steep profits.
For startups, backing from hedge funds is often alluring, according to the news outlet. TechCrunch said hedge funds tend to offer higher valuations to companies and can hand them cash faster than venture capital firms. But the hands-off approach to investing that hedge funds are inclined to take may be a drawback.
