A couple of years ago there was a lot of talk about Zombies in the startup world. Everything started with a story by Danielle Morrille, who very colourfully described the importance of recognising and keeping away from the ‘zombie’ startup, that might just be sitting opposite to you in a meeting or even worse that you become one too.
So according to Danielle, a zombie startup has several recognisable features. You are probably a zombie if:
• You haven’t hit 10% week-over-week growth for any meaningful metric (revenue, active users)
• You’re working on the same idea after 12+ months and still haven’t launched
• You’ve launched a consumer service/ enterprise service and have less than 2% week-over-week growth in signups
Does it sound familiar? However, no need to panic, the treatment has been found and it’s all in that magic book, The Lean Startup by Eric Ries. This book created the now thriving lean startup movement, and suggests that zombies can recognise that they are zombies quickly and pivot fast. In other words, it shows you the metrics for zombie measurement and a step-by-step process for healing the near dead.
While startup zombie treatment has magically been found, there is also a big question about zombie VC’s! These are mainly the guys who are earning management fees from their old funds, actively managing their current portfolios, but not making any new investments.
How can you spot that a VC firm doesn’t invest yet/already/ever? The warning signs are:
• They haven’t made any series A investments in the past 6 months
• They haven’t invested outside their existing portfolio in the past 3 months
• They haven’t made ANY investment in the past 3 months (after a more regular pace in the past)
• They constantly tell you they’re re-focusing on later stage deals, or raising a new fund
It is sad, but some VC’s will still meet with entrepreneurs, who are trying to raise money, without any intention of investing. The entrepreneur has no idea whether the VC will invest or not and it is quite difficult to check especially in the less mature European market. The good news is that new VC’s are popping up like mushrooms and we currently see plenty of firms looking for ambitious founders. Please check out the list of the active firms, that are actively investing since 2013 and good luck!
Blog by Marina Atarova – Co-Founder of Dreamstake an online network, that provides end-to-end support for entrepreneurs wishing to get a tech startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support at the appropriate time.