When Money Becomes Impatient: What the Tiger Global Era Reveals About Capital, Governance and Accountability

The decade after the Global Financial Crisis created a financial environment without precedent. Ultra-low interest rates, quantitative easing and surplus global liquidity produced not just cheap capital, but impatient capital — money chasing scale, speed and narrative over process. It was in this context that mega-funds deploying capital at extraordinary velocity came to define private markets. Among them, Tiger Global became emblematic of an era. Its trajectory offers a window into a deeper and more durable question: what happens to governance when abundance makes speed a virtue and restraint a liability?

How capital abundance quietly diluted governance

When capital is plentiful, the discipline around deploying it often weakens. In the years of easy money, diligence became negotiable rather than foundational. Term sheets thinned out, information rights softened, vetoes narrowed, and governance safeguards were reframed as commercial friction.

This was not recklessness in the traditional sense. It was a market-wide response to competitive pressure — a “fear of missing out” cascade. Each fund, acting rationally on its own, relaxed standards to stay in the deal flow. Collectively, however, the system drifted towards “diligence-lite” investing, where governance was treated as a hurdle to speed rather than a protection against failure.

When boards move from oversight to validation

Boards in late-stage private companies felt this shift subtly but decisively. Their role increasingly moved away from stewardship and independent oversight towards validation. A successful funding round at a higher valuation became proof enough that all was well.

Governance did not disappear. It became ornamental. Board meetings were held, minutes recorded, compliance boxes ticked. But substantive challenge — the kind that forces founders to slow down, confront uncomfortable realities, or rethink strategy — was often missing. When capital becomes impatient, governance still exists, but it no longer bites.

The myth of the marquee investor

One of the most enduring fallacies of this period was the belief that the presence of a blue-chip investor substituted for scrutiny. If a globally reputed fund had invested, it was assumed that the hard questions had already been asked.

This “marquee investor fallacy” softened boardroom dynamics. Independent directors deferred, consciously or otherwise, to reputation. Challenge gave way to consensus. What emerged was governance theatre — formal compliance without meaningful dissent.

Legally, this is a dangerous illusion. Under the Companies Act, 2013, directors owe personal duties of care, skill and independent judgment. These duties cannot be outsourced to investor pedigree or discharged by passive deference to market enthusiasm.

Private markets and the problem of delayed accountability

Public markets impose constant discipline. Quarterly disclosures, analyst scrutiny, shareholder activism and regulatory oversight create rapid feedback loops. Mistakes are exposed quickly, valuations correct — often harshly.

Private markets operate differently. Price discovery is delayed. Accountability is postponed. Problems can be buried under successive funding rounds at rising valuations. By the time reality intrudes, the sums involved are far larger and the damage more diffuse.

This structural lag is where law eventually enters. The Supreme Court’s ruling in the Tiger Global tax case is instructive. The Supreme Court of India reaffirmed that capital mobility does not dilute tax sovereignty, and that treaty protections give way where transactions fail anti-avoidance scrutiny. Market convention, the Court made clear, does not override legal substance.

Courts and regulators intervene after the fact, applying standards indifferent to prevailing market sentiment. The law does not ask whether a practice was common. It asks whether it was defensible.

Why this matters for India’s growth ecosystem

India’s startup story has been powered by founder-led, capital-intensive enterprises heavily reliant on foreign institutional capital. This has delivered scale and speed — but has also imported governance norms shaped by global liquidity cycles.

The ecosystem now sits at an inflection point. Domestic capital — alternative investment funds, family offices and pension-linked pools — is rising and often seeks to emulate global strategies. The danger lies not in imitation, but in uncritical imitation: copying aggressive capital deployment without absorbing the lessons of its governance failures.

If boards are seen as ornamental and investors as transient, trust erodes — not just in individual firms, but across the startup-to-IPO pipeline.

The responsibility that comes with large capital

Large capital inevitably shapes behaviour, incentives and risk tolerance. Institutional investors cannot plausibly argue that governance is solely a board-level concern, or that their responsibility ends at capital allocation.

Their real duty extends further: to ask inconvenient questions about controls, culture and sustainability beyond the next funding round. These questions are rarely welcome in buoyant markets. They are invaluable in hindsight.

There is also a virtue markets periodically rediscover: restraint. Walking away from a deal, or insisting on governance terms that cost access, is not failure. Often, it is judgment. Missing out is not always a loss.

What should endure after the cycle turns

Liquidity will rise and fall. Booms will be followed by corrections. That rhythm is inevitable. What is not inevitable is institutional amnesia.

Each cycle should leave behind stronger standards, not just larger balance sheets. The Tiger Global phase should not be remembered as a scandal, but as a lesson — a reminder that capital abundance and governance rigour must move together.

Markets forgive losses. They are far less forgiving of institutions that fail to learn. The real question, then, is not what happened in the last cycle, but what norms we choose to institutionalise before the next one arrives. That choice will decide whether capital remains merely powerful — or becomes genuinely wise.