In recent months, venture capital firms and mutual funds have become choosier about which technology startups they’re prepared to back. Now hedge funds, after helping push valuations to dot-com-era heights, are getting more picky, too.

Last month, hedge funds participated in the fewest number of venture capital rounds in U.S. tech companies since 2013, inking just two deals, according to research firm PitchBook Data Inc. Even Tiger Global Management LLC, an early backer of Facebook and LinkedIn with $20 billion under management, has pulled back. Smaller firms are getting out altogether.

Like VCs, hedge funds are more circumspect because some startups have failed to live up to their billing. Plus, in the wake of several disappointing tech IPOs, many of the most promising firms are choosing to stay private longer, meaning it takes longer to cash out. Investors’ stinginess is forcing startups to cut costs, fire workers and accept more stringent terms when raising money.

“We’ve completely stopped investing in private tech,” said Jeremy Abelson, a portfolio manager at Irving Investors, a small hedge fund based in New York. “I’m done with intangible valuations, unknown exits, unknown liquidity, and I want something that if I put my money into it now, I’m not going to hit a grand slam, but I’m going to get something that’s immediately yielding.”

Hedge Funds participated in 38 percent fewer global VC- backed deals from the third to fourth quarter of 2015, according to PitchBook. The total completed deal size dropped from $9.1 billion to $4.6 billion in the same period.

In years past, hedge funds lacked the patience required to back tech startups, risky investments that often take years to pay off. But the latest generation of Valley firms have real businesses (unlike many of their dot-com counterparts) so hedge funds have been competing with VCs for some of the biggest deals.

For example, Coatue Management LLC, a so-called crossover fund that invests in public and private companies, led a $55 million fundraising round for Snapchat. Valiant Capital Partners backed Pinterest, Dropbox and Evernote.

Some small hedge funds were attracted by the outsize returns reaped by larger firms, such as the $3.2 billion paper profit Silver Lake Management LLC earned when Alibaba Group Holding Ltd. went public last year.

“Hot markets generate fair-weather players,” said Ben Narasin, a partner at Canvas Ventures, a Portola, California, VC that has invested in such startups as Lending Club and Houzz. “Everyone rushes to the new shiny thing.”

But in recent months, some startups have put initial public offerings on hold after watching once high-flying firms stumble once they went public. Esty Inc. has lost almost half of its value since its IPO a year ago. Square Inc. and Match Group Inc. raised less than anticipated. Square’s pricing of $9 a share in the IPO fell short of the $15.46 a share it sold stock for in its last private funding round. Match is trading below the IPO share price.

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