Inc. (USA)

Research your VC

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If you’re not planning to go public, sell, or raise more money, your investors may consider you a “zombie company,” meaning they might be eager to get rid of you, especially if they’ve profited from other companies in their portfolios. So do your research: Are your VCs still counting on your company to hit it big? Or have they already paid back their own limited partners?

The difference between earning $2 million and $5 million could be huge to an entreprene­ur, but it’s a rounding error to most funds. “For a $300 million fund or even a $50 million seed fund, no one is paying attention,” says Roberts. He bets that if most of these so-called zombie companies could see how their investors assess them, they’d realize that “they are being written down close to zero.” So getting your investors out for just two or three times their initial funding— or even less—may be entirely possible.

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