Tech startups now have a new avenue to raise capital from: hedge funds.

By now, it’s no secret that the U.S. is undergoing another tech boom that has led to a wave of successful new startups. Some of those startups are now going public at sky high valuations that are vaguely reminiscent of the dot-com era.

Traditionally, startups have turned to the venture capitalist community for initial funding. VCs often get a nice chunk of equity in the company in turn for their patience and risk. Some companies can take over five years before their business plan comes to fruition and pays off.

But hedge funds, hit by declining returns in equity markets and other asset classes, are looking for new ways to invest and seeding tech startups appears to be right up their alley. Several large hedge funds have specific VC desks for doing just that, including the likes of Tudor Investment Corp., Tiger Global Management and ESL Investments.

VCs simply have a different style of investing compared to a hedge fund, which may want to change up management and operate similar to a private equity firm.

“Behind the closed doors of venture capital decision makers, a few things happen that many start-up entrepreneurs are not aware of,” Greg George, a venture capitalist and financial risk consultant, told Markets Media. “First, forget them agreeing to sign any type of NDA – they simply look at too many deals. That said, if you are working with a reputable firm, trust goes a long way and they don’t want to be known on the street as people who disclose confidential information.”

Some VCs have coffers of more than a billion dollars, giving them buying power similar to that of a hedge fund. As private shares in startups become more popular, VCs and hedge funds will no doubt go toe to toe on seed investing.