Startup Index,  Startups

Zombie VC Post – The Bug Report

What’s this? I usually pick a song I feel goes with the post and expresses my mood writing it. Enjoy, I hope it will enhance your reading experience.

I’d like to address some bugs from Yesterday’s Zombie VCs post, which provided a list of investors who were inactive in Series A deals in the past 6 months according to Crunchbase, a self-reported database of deals updated by startups and their investors as follow-up to a post about helping founders find active investors during the Series A crunch and avoiding taking meetings that are a waste of time.

I would like to express my appreciation to O’Reilly AlphaTech Ventures, MMC Ventures, Lightbank, Kepha Partners, Paladin Capital Group, Mercury Fund, Neu Venture Capital, Shasta Ventures, Genesis Partners, Magma Venture Partners, Kima Ventures, Greylock Ventures Israel, Softbank Capital, Carmel Ventures and Emergence Capital for reaching out to provide data and help me confirm they are currently actively doing Series A deals in recent months. Big thank you also goes to Shira Abel, who has been reaching out to Israeli VCs to get them updated and on the active list.

This index can be improved, but I will not stop publishing it monthly and even with flaws it helps entrepreneurs focus their efforts on the most active firms.

The Data Is Crap

I used data from Crunchbase, which is much less accurate than I thought it would be. I did expect some errors, but mistakenly thought the 6 month window was big enough to limit that and didn’t take the time to validate the list or contact the companies on it. I also limited the list to funds who participated in Series A deals in the past, but it turns out many of those were one-off deals from growth capital firms or follow-on from funds who primarily focus on seed. I should have taken more time to research this data, cross check with other sources, and at the very least reach out to some very obviously active firms like Shasta to find out more info before publishing.

I am still a huge advocate for Crunchbase, which I think is a treasure in the startup community, and encourage investors to update their profiles. I have also submitted a feature request to them to allow investors to update activity without revealing the companies, so we’ll see how that goes. Founders aren’t reading paid subscription data services or VC insider newsletters and I don’t think it is realistic to expect them to start.

The Methodology Needs Work

While I believe this first attempt raised some transparency around investor activity, a mea culpa is definitely necessary where methodology is concerned and I wholeheartedly agree with Fred Destin’s suggestions in ZOMBIE VCS TAKE II – HOW TO SPOT AN ACTIVE FIRM which jives well with in-depth methodology feedback I’ve received privately as well. I have included a list of corrections in the original post, and also updated active investors list for March 2013 as needed. Going forward I look forward to offering an updated active investors list, and I will be leveraging additional data sources that have been offered (thank you) and contacting companies.

Listing Inactive Investors is of Little Value to Founders

Creating a list of inactive investors isn’t very constructive, and is of little practical value of founders. What founders want to know is which investors are active, they care much less about who is inactive. I have been working through many ideas around the best ways to track fund performance which are still specific and transparent but are also credible and helpful, and I welcome your input in the comments, via email and on Twitter to help me improve this.

There were several smaller bugs as well, including:

  • The title also turned out to be much more sensational than I would have expected, playing off of my previous “Zombie Startups” post
  • The disclaimers about data quality were not clear enough to many readers
  • The use of the “total deal participation size” number to sort the list was useless (and has since been removed, it is now alphabetical)

As a blogger I believe in offering insight based on experience, a data-driven perspective wherever possible, and actionable details that are useful for founders (like a list of investors who are actively doing deals) whenever possible.

I would also like to acknowledge, though I cannot name, dozens of people who have sent me tips and other info I am following up on, hopped on calls with me to explain their perspective and ideas for how to make this better and more useful for entrepreneurs and the ecosystem as a whole, opened up APIs and other data sources for additional research, and expressed their appreciation and shared personal stories. They bring a huge range of experience across the entire startup community including founders, associates, VCs with names you’d recognize, long admired heroes of venture and tech, quiet “guy behind the guy” types and everything else in between. I’m listening and working to bring their feedback into the content I create in the future. I know I will not win over people who don’t want this information made public, and quite honestly I just don’t care. This one’s for all the founders in the struggle.

Thanks to Fred Wilson for the inspiration on how to craft this post.


  • William Carleton

    Awesome project, and great judgment calls on the adjustments you are making as you go.

    A quick thought re some of the reaction I’ve seen, to the effect of, some companies don’t want others to know they have raised a round. Well, to the extent companies still file Form D’s (and I know many in CA are choosing not to do that in recent years; but many or most still do), both the fact and the size of the rounds become public information.

    That the SEC, for a couple years now, makes the Form D’s accessible electronically through the EDGAR database, makes it possible (feasible, too? not sure) to verify, if not exactly the roster of investors, then as I said the fact of the round, its size – and also the number of investors.

  • David Aronoff

    Danielle – great post and also great follow up. I agree completely that the most valuable element of your exercise would be a current and reliable list of active investors – ideally one that founders can use to target the right “fit” which would be better for them (and us too).

  • Mike

    thanks for the follow up, I think this list is going to be a very valuable resource for entrepreneurs who don’t have time to waste when it comes to raising money.. I look forward to further iterations!

  • Mike Nugent

    Thanks for getting this discussion started!  I’d like to add a few points as a former LP turned fin-tech entrepreneur that will move the discussion beyond a binary evaluation approach, and to emphasize two additional dimensions for evaluating VC firms: 1) ability of the firm to invest and 2) the perspective of Limited Partners (“LPs”).

    Regarding ability to invest: just looking at North American VC in general, at Bison ( we have tracked 55 fund closings since August 1, 2012 and currently have 149 VC seed / early stage funds that are raising money. The former number points to a steady flow of capital into the VC asset class. Yet, the latter number indicates that there is a funding gap for VCs, with many funds having problems raising capital from traditional LPs. Additionally, 29 of the zombie funds that were previously identified have raised almost $17 billion, in aggregate, since January 1, 2010. Many of these firms are in the middle of their investment period and likely have significant capacity for new investments.

    Second, when evaluating a VC/PE firm as an investor, it may be helpful to understand what professional, institutional LPs look for when considering an investment. At least five factors stand out:
    1. Previous funds:  Date of most recent fund raised can help establish a baseline for evaluating whether a VC firm has monies to invest.  Per Fred Destin’s point, the investment period for most funds is five years, although fundraising typically occurs roughly every three years, when the funds are 70% accounted for (invested, committed and reserved).

    2. Currently fundraising:  If the VC firm is currently fundraising, progress on fundraising will help you evaluate how attractive the firm is.  The longer the fund is in market, the more likely you are dealing with a down-trending firm.

    3. Past investments:  More than looking for a match between your business and the firm investment approach, you should consider where the firm sources investments from (all YCombinator or TechStars startups or did the founders go to MIT) and if there are any patterns of timing around investments.  The point is to understand if there is a method for finding portfolio companies.

    4. Recent exits:  While big exits are always interesting, even smaller exits may be indicative of a firms ability to deliver returns to LPs and should be considered. It is not about the logo of the deals they do, it is about the likely return the firm can generate.

    5. Managers:  Previous firms and alumni networks as well as speaking-engagements, news coverage, and twitter activity can be helpful to consider.

    We gather a lot of data from a broad number of sources, let us know if we can help you in future analyses!
    Mike Nugent (CEO @ Bison)

  • Matt Kaufman

    Danielle, great analysis and thanks for sharing with the everyone. Please let us know if we (CrunchBase) can be of any assistance in the future.

    BTW, if you are finding gaps in the CrunchBase data, please let us know… Sounds you may have gotten some additions / corrections that we missed (O’Reilly AlphaTech Ventures, MMC Ventures, etc.) and we’re doing our best to improve the accuracy and breadth of our dataset – every bit of information helps. Just drop us a note at feedback(at)

    Matt Kaufman (President @ CrunchBase)

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