For companies that rely on outside investment to survive however it can become a slide to oblivion.

If the company itself is profitable, then typically it can continue. There's no interest rate on VC investment, and if profitable it can run forever. Customers, employees, users and so on are all fine. Investors? Well, they're potentially getting some returns through dividends, but its minor and not what they were chasing.

Of course the VC investment model is high risk. That's kinda the point. It's a bet on IPO or (valuable) acquisition. Most companies end up as neither.

Will this affect new VC funds in the future? Maybe in the short term. But there are still enough IPOs (like SpaceX now) and still enough greedy people willing to play the lottery. Sure the absolute amount of VC money may come down, but I don't think the model is going away.

Indeed it may start to lead to saner valuations along the way.

332 out of 1900 isn't that bad?

Even the further 338 if confirmed would still be less a minority of the overall 1900

I'm still really close with a lot of early employees and while I was lucky enough to have a liquidity event happen shortly after I left that allowed me to cash out for a decent, but not life changing, return, many of my friends were not.

One of the things I think a lot of people may not realize is how badly this zombiecorn state fucks employees with stock options. A lot of startups will give you a limited amount of time after you leave to exercise your stock options (90 or 180 days is common based on my experience). If you don't exercise your stock options and buy your stock within that time period the options expire and you get nothing. The problem is that if you buy the stock, you won't be able to sell until there's a liquidity event (usually a new funding round or IPO) and current investors don't want to take investment at a lower price unless they absolutely have to.

I know some other early employees who were laid off who had to make the choice between dropping $75k or $100k to buy stock that is worth 10x that on paper (even at the current valuation) and praying for a liquidity event that will probably never arrive or letting go of shares that just a few years before seemed like they would be a life changing amount of money. I know people who've done both and neither route leaves people feeling good about their decision.

I know common wisdom is that you should treat that stock like it's worth nothing until they day you sell, but when you've worked at somewhere for 5-10 years and seen the on-paper value of your stock rise to a life changing amount of money, I think it's hard not to assume that you'll be able to cash that out one day.

It's like asking someone playing roulette to value "13 black", after they bet on it.

There valuations are always based on expectations of huge growth, not current value. Growth predictions with an extremely low confidence level. VCs make up for it by making a lot of bets.

The companies NEVER have current profits (The actual measure of value) that would justify their valuation.

So, it's comparing gambling payouts to corporate valuations, aka "apples to oranges", which are not related.

When the predicted growth doesn't occur, the companies valuation becomes based on its actual value (profits).

Same article:

https://www.businesstimes.com.sg/opinion-features/zombie-uni...

Zune-icorn?

Zombicorn!

I know of some actual in use Microsoft Zune that have outlasted many companies that were predicted to become unicorns.

That's not to say that surely there's also plenty of once-unicorns which really are borderline bankrupt, and that lots of these companies were extremely overvalued and VCs made bad deals in the ZIRP. But the term "zombie" is a derogatory anti-entrepreneur term invented by VCs who try to encourage founders to "go big or go bust", quietly disregarding the huge incentive mismatch they got. Because unlike the VCs, the founder has all their eggs in one basket.

For an employee, it would seem like the only (financial) reason to stay at one of these companies is if you didn't have any other options - which I imagine is reasonably common these days with the tech job market being in the shitter. But stock options at these places are nearly guaranteed to be worthless, with any sales proceeds going to investors with preferred shares.

I think a lot of employees may stick around for social/personal reasons ("I helped build this company and I want to see it have a successful exit"), but speaking from experience, it's better to cut ties and move on. Time is your most precious resource, and using your time on a slowly dying company is usually a poor use of that resource.

It really sucks for employees as their equity stake gives reason to stick around if there’s a good exit, but as every day passes odds increase that either the company goes bust or gets sold in some aqui-hire or salvage sale that gets investors something back but tends to leave employee shareholders with nothing.

There are post IPO tech zombies as well. Companies that IPOed and aren’t at serious risk of bankruptcy as they have cash, but aren’t profitable and nothing they seem to do changes the trajectory of the company. They could coast for years to come just slowly burning cash but have no clear prospects either to be anything more than a has-been just coasting along the train of irrelevance.