Startups' New Money Machine

Hedge funds and mutual funds chip in, and take on more risk.

It would take a long time to print $17.7 billion.

Photographer: Andrew Harrer/Bloomberg

Hedge funds and mutual funds, which usually invest in publicly traded companies, have lately poured billions of dollars into hot startups. Uber, Airbnb and Dropbox have been funded by non-venture-capital funds such as Wellington and T. Rowe Price. Other businesses with billion-dollar-plus valuations (so-called unicorns) have taken money from Fidelity and BlackRock, as well as hedge funds such as Tiger Global and Coatue.

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