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Zombie VCs
- jchonphoenix 14y agoThe list doesn't seem that accurate. Some of these "VCs" are actually angel groups that don't do Series A, other than follow ons (Webb Investment Network). Others have started Angel funds (Ron Conway) and no longer invest personally.
- arbuge 14y agoThen there's outfits like Tiger Global, which doesn't do series A's... and I have no idea what Charles Schwab is doing on this list.
- dmor 14y agoAll of this data is from Crunchbase, and the column D "Date of Most Recent Series A Investment" indicates they participated in the round though they might not have lead.
- andrewljohnson 14y agoYou hold up "all this data is from Crunchbase" like it's a shield, and basically say the same about your Alexa web numbers for YC start-ups - don't blame me, blame my methodology! Why not try and come up with a more robust method than pouring over CrunchBase and appending "Na ni na ni boo boo VCs, if this data is wrong, contact me,"
- dmor 14y agoIt's not a shield, it's a sign. I'm working with limited public data trying to create something new and I'm working on improving it but it takes time - making this post alone was a labor of love and I realize this kind of analysis still has a long way to go. One of the best ways to get data to make these lists better has been to publish what is available and get feedback on what is wrong, where to look, who to ask etc. When I make these posts suddenly people start returning my emails requesting data. It also occurs to me that we have no problem judging and speculating about startups based on nothing more than a TechCrunch post with extremely limited public data. It's funny that it is so much less socially acceptable to do this with investors. Maybe I can change that.
- mindcrime 14y agoIt also occurs to me that we have no problem judging and speculating about startups based on nothing more than a TechCrunch post with extremely limited public data. It's funny that it is so much less socially acceptable to do this with investors. Maybe I can change that. Love it! Keep up the good work, dmor!
- ganeumann 14y agoGoing public saying "don't work with these funds" and then telling them you'll take them off the s!!t list when they share their private data with you sounds an awful lot like what in other walks of life people would call extortion. I have a list of everyone who has paid their credit card bills in the last several months (the list only covers people who live in my apartment.) You are not on it. Is it okay if I put up a public website calling you a deadbeat? If you don't want to be on it, just send me a copy of your bank statements. My firm (Neu Venture Capital) is on the list, despite doing a Series A a few months ago, a Series B last month, and three seed deals in the last six months. O'Reilly Alphatech is on there, despite raising a $85 million Fund III six months ago. Quotidian is doing deals, Chris Sacca is doing deals, etc. Crunchbase data is incomplete. Saying people have done something based on it is relatively safe; saying people have not done something based on it is scurrilous. [edit: the second paragraph is a hyperbolic analogy. I don't have such a list and I wouldn't use it that way if I did. That was my point, that it would be wrong to make that sort of implication based on data you know is incomplete.]
- dmor 14y agoTo be completely clear, I did not say in my post that founders should not work with these investors. I said it might be a waste of time to pitch them on a Series A, since it doesn't appear from publicly available data that they are doing those sorts of deals lately, and that founders should proceed accordingly. I understand your frustration, startups used to cringe at mentions in the press but have come to understand that the world is interested in how they work, what they do, who they are and whether or not they create value. Investors have had remarkably less written about them and if they are not publicly sharing the fact they are helping founders get Series A deals done I hardly see why I shouldn't point it out, and create an incentive for greater transparency. I will work to investigate more deeply and create a more useful data set.
- lquist 14y agoOr they aren't interested in the deals/valuations that they're seeing? As a former investor, an entrepreneur that thinks he/she understands my business better than I do is a big red flag.
- dpritchett 14y agoKudos to Danielle for trying to pierce the veil. Feel free to challenge her data and analysis with better data and better analysis.
- obviouslygreen 14y agoI guess if that's what you're interested in, this could be what you're looking for... though this is a lot like picking stocks based on price patterns: It gives you a phenomenally narrow view based solely on results with absolutely no insight into how or why things are happening or not happening. I can see how this information, were it in any way insightful, would be useful to a lot of people. However, not only are the criteria very arbitrary, the list is being built from admittedly incomplete and/or incorrect data, and the opt-out-of-my-public-shaming approach is disingenuous at best.
- mindcrime 14y agoAs a former investor, an entrepreneur that thinks he/she understands my business better than I do is a big red flag. Funny you would say that, given the perceived typical information asymmetry between investors and entrepreneurs. It would be just as accurate to say: As an entrepreneur, an investor that thinks he/she understands my business better than I do is a big red flag.
- lquist 14y agoI completely agree. And I should mention that it's not that I don't think it's possible for an entrepreneur to know more about investing than I do, just that it shows hubris.
- manishsharan 14y agoIsn't this like the third blog post from daniellemorril.com within the last 2 weeks making it to HN front page ? Also -- it seems obvious that while the author has tools to crawl web sites and pull data into a CSV, it seems dubious that the author spent anytime in running a manual sanity check before presenting her findings. For example, "O'Reilly AlphaTech Ventures" and "OReilly Alpha Tech Ventures" are the same thing.
- dmor 14y agoAuthor here. I have presented Crunchbase data as is without any "cleaning" but I assure you I have run a sanity check on the companies involved, and emails are pouring in from founders confirming they have experienced wasted time with investors on this list. I am happy to de-dupe those two items on the list and check for others, and will continue to fix any other errors people report.
- codex 14y agoDo you think you would get a similar volume of emails if you posted a list of VCs selected at random? I suspect so. Many are called but few are chosen.
- dfriedmn 14y agoAlso OATV is a seed fund – they may have participated in a few series A's in the past, but probably don't deserve to be mentioned in this list. Should probably add a filter for investors that do 80%+ seed deals and just a few series A's.
- dmor 14y agoDon't you think it is worthwhile for founders to know an investor used to do seed and follow on into the A round, but doesn't appear to be doing so anymore?
- reneed 14y agoRenee from OATV here. OATV.com clearly articulates our investment thesis and deep-reserve model. It hasn't changed. Perhaps, as others have pointed out, you should reconsider using Crunchbase as a reliable or up-to-date source of information. Or, at a minimum, do some supplemental fact-checking via Google.
- neurotech1 14y agoIn the same way at a VC will often send you to an associate because they’re “too nice” to say no. Thats one thing that bothers me in business, is the "social contract" of avoiding appearing abrasive or aloof, so everyone tells each other white lies to make everyone feel better. I'm not referring specifically to VCs (I have almost no experience with VCs). Contrast that with somebody like PG who has a reputation for being blunt, but also being constructive and generous with his time. Accountability belongs on both sides of the table is for everyone's benefit, and Danielle is right to call attention to this.
- hkmurakami 14y agoWe're also in a business world where we can't be upfront with our insecurities, worries, personal failures (unless they somehow lead to you becoming Herculean thereafter), self-doubt, etc. No, it is not healthy, and imo it contributes significantly to the detriment of our mental health.
- rhizome 14y agoBusiness health, however, thrives on information asymmetry. "How the VC really feels," is just another instance of it.
- orangethirty 14y agoThats one thing that bothers me in business, is the "social contract" of avoiding appearing abrasive or aloof, so everyone tells each other white lies to make everyone feel better. That happens everywhere in life.
- anmol 14y agoI wish there was a way this information could be used to update thefunded.com (assuming they're consistent)
- arbuge 14y agoMaybe this is evidence of the series A crunch more than it is evidence of zombies... some of the names on that list are not what you normally think of in the zombie context.
- olivercameron 14y agoI'm pretty sure Ron Conway is not a zombie VC.
- dmor 14y agoI wouldn't be so sure. In addition to Ron's stats shown on the list, SV Angel also has not participated in a Series A since January 2013, but was on a regular 1-2 Series A deal a month pattern before that (in addition to tons of angel). http://www.crunchbase.com/financial-organization/sv-angel http://www.crunchbase.com/financial-organization/sv-angel With David Lee moving to LA and Ron Conway much more involved in politics, I'll be watching
- arbuge 14y agoI thought SV Angel does mostly seed rounds, not series A... seems to me alot of the names on this list are firms that specialize in non-series A deals but might have occasionally thrown a series A into the mix. Flaw in the methodology, I think.
- benatkin 14y ago> might have occasionally thrown a series A into the mix dmor said: > on a regular 1-2 Series A deal a month pattern before that I think that's enough that it could lead some founders to look to SV Angel for Series A funding. It may be only a fraction of what they did, but it's still useful for people to be informed of this, because Ron Conway didn't announce his intentions in the matter.
- maxstoller 14y agoAgreed, the title is a bit sensational. There are a handful of active, quality firms on this list. I don't think it's fair to call out SoftBank Capital, Quotidian, etc. I appreciate the goal here, but the approach is flawed. (FWIW, I work in venture, but the firm I work at is not listed.)
- chimeracoder 14y ago
- ashbrahma 14y agoI don't see how PE firms such as Warburg Pincus/Tiger Global belong on this list.
- dmor 14y agoWarburg Pincus participated in a $26M Series A in CrowdStrike in February 2012. Tiger Global participated in a $10M Series A in BelezanaWeb.com.br in May 2012 and a $8M Series A in Olacabs in April 2012.
- ios84dev 14y agoHave they participated in any more? It seems like one off investments by giant PE firms probably aren't helpful to any startup that doesn't already have a personal connection to those firms.
- aviswanathan 14y agoI really enjoy these posts by Danielle. For entrepreneurs head-deep in product and not at the fundraising stage yet, these posts are really informative and paint a quick picture of the venture scene. Kind of wish there was a dedicated site that pulled data like this in from Crunchbase, etc. on an ongoing basis and produced reports/graphs. Side project idea maybe?
- biznickman 14y agoI've been building something like that at startupstats.com
- orangethirty 14y agoBrilliant. Takes guts to call out VCs like this. Now, I don't think your 6-month time period is the right data point to measure if they are a zombie or not. There are a lot of different reasons why VCs take short investment breaks, and the 6-month period does not allow for that. I think 18 months is more in line, because it allows you to see more of the failed investments and results overall. A zombie VC should be defined with a ratio of failed (money lost) VS. successful (money gained) deals. If they have a lower than average ratio then we can say that their confidence (and the confidence of their bankers) is down, and they are operating in Zombie mode. But I'm probably wrong, because I am a value investor.
- dmor 14y agoI think that is another valuable thing to measure in terms of overall success and direction the fund is going, and I'd certainly like to. I was hoping this would help founders who are trying to raise Series A right now figure out where to focus first - but I agree taking a longer view would give a more complete picture. It just needs a bit more math and data, but I'm noodling on it.
- orangethirty 14y agoI do agree that it helps, and accomplishes your goal. Though I don't think VCs will applaud your efforts too much (well, some may). They also go through slumps, and unlike entrepreneurs, they don't like to talk about it. It hurts their credibility due to how bankers always want to bet on the lucky horse.
- hippo33 14y agoDo we need to pander to VCs? I'm also not sure that your assertion that it hurts their credibility is true. Fred Wilson has publicly admitted himself that he hasn't led a deal all year. I don't think that affects his reputation. If anything, I think people applaud him for his transparent efforts.
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- JimWillTri 14y agoYou're relying on Crunchbase data? It appears (now I could be wrong) that even the Crunchbase data on your own company is wrong. Crunchbase shows referly raised $2m. Is that correct? If the Crunchbase data on your own company is wrong, how can you possibly rely on that data to evaluate other VCs/companies?
- jpdoctor 14y ago> In the same way at a VC will often send you to an associate because they’re “too nice” to say no, I'm going to guess that the author has never raised significant money (>$10M) from VCs. The quoted sentence fragment speaks volumes on a lack of understanding of the VC animal kingdom.
- dpritchett 14y agoThis comment is salacious and yet ultimately unsatisfying. Please share!
- tptacek 14y agoI don't understand this. I haven't quite raised 10MM in a round at a company I actually cofounded, but I came close to that number, and that 'dmor sentence didn't so much ring true as seem banal and obvious. Associates are who you talk to when VC's want to blow you off. And VC's rarely say no.
- sachinag 14y agoI've been an entrepreneur. And I've been the low man on the VC totem pole. If I'm the only one from my firm at an event or conference, you want to see me. If you're coming to our offices, you don't.
- crapshoot101 14y agoNot true. Done multiple initial meetings that have lead to investments. This is one of those myths that is silly and wrong-headed.
- 7Figures2Commas 14y agoThis post merely highlights an important fact many entrepreneurs who are looking to raise capital ignore: you're not in control of your own destiny. If you can't move forward in building your business without investor money, you're forced to spend more time and energy on the fundraising game than product, sales, marketing, and business development. The data presented here may or may not be accurate or interesting, and the conclusions drawn from it may or may not be valid, but regardless, worrying more about the state of VC firms than your own company is a losing proposition.
- mindcrime 14y ago...but regardless, worrying more about the state of VC firms than your own company is a losing proposition. This, a thousand times this. I know I've ranted about this a lot lately, but I think (some|many|most) entrepreneurs would be better served to focus on how to get customers and fund their companies through organic revenue growth, rather than climbing on the "funding merry-go-round" right away.
- spartango 14y agoInterestingly, more than a handful of the funds listed in the list of zombies are life science and healthcare-related funds. As someone running a biotech startup, this is rather relevant to me... It occurs to me that the cutoff of 6 months since last round may be a bit short for the life science world, where funds tend to make fewer, bigger investments with lower frequency. It's also interesting to note that a few strategic venture funds are listed (Novartis stuck out at me) and that these guys might not fit the same mod, given that they invest with eye on relevance to the mothership. With those two caveats in mind, there are also some indicators to suggest that early stage investing in biotech/life-science startups has been slowing down over the last few years. There was a big of a boom prior to this, but it's fairly widely acknowledged that there haven't been good returns for the billions of dollars poured into early-stage biotech companies. There's now a bias toward larger series A's on slightly lower risk startups...
- dmor 14y agoI would be happy to make you another list that has 12 month cutoff, would that help? We were discussing last night whether health/biotech funds have a different cycle than web tech, would love to know your thoughts on that.
- ChuckMcM 14y agoDanielle, I enjoy your posts (and there have been a lot of them on HN of late) but question how much faith you want to put into Crunchbase. It suffers a bit from "Wikipedia disease" which is that its sort of self selecting and the quality of the information in it varies quite a bit. A great place to look for symptoms but I don't know how much faith you can put in conclusions drawn from it's data.
- zbruhnke 14y agoI can totally vouch for the lack of curating that is done on Crunchbase data because a couple of months ago I had people congratulating me on the 1.2M seed round that my startup had raised ... my startup that at the time did not even exist as a company yet much less had it been looking for investment. I respect what Danielle is doing and her post have been interesting lately(leads me to wondering what the pivot for referly is going to be) but I definitely would not solely get data from places like Crunch base. They have some competitors out there who curate their data MUCH better but they also happen to charge for access to it.
- klochner 14y agoPublishing the list feels unprofessional and manipulative, especially considering: > When I make these posts suddenly people start returning my emails requesting data. Even as a causal observer of the VC market, I was able to spot a lot of false positives in that list.
- hippo33 14y agoHow is this manipulative? While the data may not be 100% accurate, I think the author makes a lot of great points about finding out what series A deals a particular investor has done to know whether this is a good fit.
- sheri 14y ago> These are partners at venture firms who are 3-5 years into investing their fund, don’t have very strong results so far, and are struggling to raise new funds. The post is manipulative because it defines zombie VC's as above. However, the data used to arrive at the list does not hold up to the above definition.
- gojomo 14y agoOften "publish-then-correct" reaches the truth faster, asymptotically, than waiting to get everything right before publishing. Call it "Minimum Viable Truthiness", if you'd like.
- klochner 14y agoIt just felt to me like retribution for this: https://news.ycombinator.com/item?id=5491293 https://news.ycombinator.com/item?id=5491293 Where I'm guessing that refer.ly is trying to raise their own series a and possibly getting frustrated. That said - entrepreneurs should be more concerned with growing a business than making friends with VCs, so more power to danielle if this is how she ends up making it work.
- dmor 14y ago
- asanwal 14y agoYes -- there are many Zombie VCs. And glad to see Danielle doing this stuff but you have to be careful in drawing these conclusions. First, many funds don't do Series A's. That is their strategy. At the top of the spreadsheet are several funds that are mid, later, growth and private-equity stage firms (IVP, Warburg). Them not doing Series As has less to do with their Zombie status then them adhering to their strategy. While there are other issues with the data as highlighted below, this issue of fund strategy is a critical one so wanted to highlight. Also, picking short timeframes of 3 months or 1 month isn't a great test as funds have 7-10 year lifetimes. A couple of months doesn't make for a trend. Again, we think there is value in highlighting this data as there tends to only be good news reported but just would caution against errant conclusions. Notes: I'm one of the co-founders of CB Insights and our firm tracks this data. We actually help LPs (the investors in VC funds) identify VCs doing poorly or who appear to be the walking dead. But it's messy as hell. More on that here for folks interested - http://www.cbinsights.com/team-blog/investor-analytics-zombie-venture-capital/ http://www.cbinsights.com/team-blog/investor-analytics-zombi... (warning: part informational and promotional)
- nsiemsen 14y agoDo you have a team that sources all your data for you or does it come from CrunchBase? (is that the CB?)
- asanwal 14y agoWe started a company called ChubbyBrain (CB is our tribute to that). 0% of our data is from crunch. In terms of where it comes from: 80% of our data comes via software we've built to parse news, SEC, investor, corporate websites (we crawl about 12k of them daily). About 20% of our data comes directly from investors. The biggest contingent is angel data which we get via a partnership we have with Silicon Valley Bank and the Angel Capital Association.
- antr 14y agoAnother great thing about Danielles's post is that this will hopefully incentivise funds/investors to update their public information on databases such as CrunchBase. I'm pretty sure some investors are not happy to see their name on that list, not because they are "zombies" but due to a simple case of not updating their transactional/deal information.
- arbuge 14y agoI think it's a major flaw to this analysis that alot of those firms specialize in non-series A financing and only do occasional series A investments. Calling them zombie VCs is inaccurate and makes no sense. Examples: SV Angel, Charles Schwab, Warburg Pincus, Tiger Global, etc. That, plus the fact that Crunchbase is incomplete to begin with, as others have pointed out.
- marcamillion 14y agoDanielle, Firstly....you have more balls that many guys I know. Kudos to you for doing this. As Obama said, Sunshine is the best form of disinfectant. High time we get a complete glimpse into the state of VC. Who is bullshitting everybody and who is not. Who is earning their keep and who is living off the exhorbitant mgmt fees they charge LPs. On behalf of all entrepreneuers, thanks for starting that process.
- spullara 14y agoI'd say that most of the mistakes in this are pointing at Crunchbase not being updated. Some of these firms in the top 10 have had several investments in the past 6 months as reported by Techcrunch...
- HowardMarks 14y agoWe are seeing more and more Zombie VCs as funds are imploding and partners are being recycled into new funds. Ultimately, they are investment professionals such as Samurais are ronins when they loose their master. I think startups should keep in touch with them because the Zombie VC will reappear either as a VC or working for a cool internet company.
- rgrieselhuber 14y agoThis could be a potentially valuable resource but the definition of zombie seems to ignore that at least some of the investors on this list do more seed deals than anything else. It should filter for that appropriately.
- pazimzadeh 14y agoI love these posts, please keep them coming.
- codex 14y agoThis post goes to show why journalistic standards exist, and that bloggers are not journalists.
- tylerhwillis 14y agoApplaud the effort, despite the data problems. In its current state I consider it more interesting than useful, but future versions could clearly be massively useful. One thought: since many reg d filings are purposefully delayed by 1-2 months to control timing (and press) it might be more effective to analyze the time period of 9 mo ago to 3 mo ago. May also be useful to add levels of caution (yellow is no deals in the 6 mo period, red is no deals in 12+). Also, factoring in deviation from normal behavior would be a wonderful addition (and would remove some of the folks without much data represented)
- nivertech 14y agoI think there is a market for quantified version of TheFunded.com. But the data must be much better quality than CrunchBase and curated by ex-VCs and not by active entrepreneurs.
- SilconValleyVC 14y agoIn my experience, if you want reliable info (NOT Crunchbase nor companies who just crawl/spider them and resell it to you, you know who you are right below) use PrivCo, what I use in VC. It's reliable, confirmed with the VC firms and the startup founders. Rarely find anything off (crunchbase if way off as all the HN crew already has figured out). Just do a search for VC firms and specify what date YOU want their last investment to be...everyone has different critera. If you think if it's been more than 6 months it's a "zombie VC" (I personally disagree, because without getting technical depends on age of the fund...a new 10-year fund invests most of its money in the first 2 years in a nutshell) then pick 6 months on PrivCo VC firm search for last investment. If you think it's 12 months search for 12 months. 18 months, search for that. Don't go by this nonsense list with arbitrary 13 month "cutoff", especially when many of these deals aren't announced - so they do have deals as evidenced from fellow HN crew discussion below missing, so the "no deal in 13 months" is wrong to begin with - you need a dedicated firm like PrivCo (or DowJones VentureSource) to diligently find those deals day after day. Just 1 missing VC deal for a firm throws off the entire "13 month zero deals" input there = output worthless. Long way of saying search for venture capital firms in my humble opinion using PrivCo and the search criteria: last investment must be within X months, plus must have made investments in the precise sector you want, etc. Then you get the results, export to Excel, and it even has updated names and direct emails of the partners. It's a beauty. Might be others I haven't used too but this is what I personally use: http://www.privco.com/investors http://www.privco.com/investors Jake