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according to media reports, more and more bytedance shareholders have begun selling their shares.but a new york venture capital firm that has already invested more than $100 million in bytedance is still eager to buy in.

mitchell green, founder of lead edge capital, which has been buying bytedance shares from other investors, said:even assuming the u.s. forces bytedance to divest tiktok’s u.s. operations or shut down tiktok, bytedance’s stock is still “ridiculously cheap” given the company’s size and growth rate.

“i don’t think people fully appreciate how big the china business is and how small the u.s. business is as a percentage of the overall company,” he said in an interview.bytedanceis growing two to three times faster than facebook...and it's trading at a fraction of facebook's valuation.

the u.s. government is trying to get bytedance to split up tiktok on national security grounds. tiktok has repeatedly denied the allegations and sued the u.s. government. in a recent court hearing on the lawsuit, the judge asked questions that showed tiktok faces challenges in winning the case.

green said the lead edge team has assumed a u.s. ban on tiktok would take effect in 2025 and factor that into any additional investment the company makes in the business.

questions about tiktok's fate in the united states and a muted u.s. initial public offering market have delayed the prospect of a u.s. listing.the uncertainty has led several investment firms to sell some of their bytedance shares, a move that enabled them to return cash to shareholders and, in some cases, distance themselves from the political hot potato.

coatue management, a major early backer of bytedance, recently discussed selling part of its stake.the company's founder, philippe laffont, also stepped down from the company's board in august. g42, notable capital (formerly ggv capital) and nea have also sold their stakes in the past few years.

lead edge, on the other hand, has been buying bytedance shares during this period.

it first bought bytedance shares in 2020, when the company was valued at $180 billion in a round led by kkr and sequoia capital. in 2022, green raised a new $2 billion fund to buy shares in mature companies and continued to buy bytedance shares from other investors.

when lead edge first invested in bytedance, there was a good chance that the company would go public in 2025 or 2026, green said.since then, bytedance's revenue has surged from $34 billion in 2020 to $120 billion last year, bringing it close to facebook parent meta platforms' $134 billion in sales in 2023.meta’s current market value is about 10 times last year’s revenue. using the same multiple, bytedance’s market value exceeds $1 trillion.

the valuation of bytedance shares that investors like green bought from other shareholders has not kept pace with its revenue growth. at the peak of the 2021 bull run, it was valued in secondary markets at as much as $400 billion. in july, shares traded at a valuation of $228 billion, according to caplight, which tracks secondary market transactions.

lead edge’s stake is small compared to investors who bought into bytedance before tiktok exploded. coatue, for example, owns less than 5% of bytedance but is worth billions of dollars.

but bytedance remains a major opportunity for lead edge, which green founded in 2011 after stints as a young investor at bessemer venture partners and at offshoots of the hedge fund tiger management. he is a former competitive skier, a hobby referenced by the ski slopes in lead edge’s name and logo.he raised the firm’s latest fund from hundreds of individual investors, many of whom hold senior positions at companies including nike, blackstone and uber.

green is not concerned about the delay in bytedance's ipo, mainly because lead edge has held bytedance shares for only four years, far shorter than the typical time venture capital firms hold private shares. as startups delay going public, venture capital firms are holding on to their shares longer. for example, stripe, which was founded in 2010, has had many of its investors hold on to its shares for more than a decade, waiting for an ipo.

“we’re not going to make an investment and exit in two years,” green said. “so i don’t care if they go public in 2026. i don’t care if they go public in 2030.”

lead edge has also bought shares in china’s alibaba and ant financial group in the secondary market, and invested in lesser-known tech startups such as tax software company holistiplan and igm technology, which provides financial software to municipal governments.

but the firm rarely considers investing in chinese technology companies, except for the largest ones.