Hey there!

It’s Sparsh here!👋 

Some startups are not dead, and they are not growing either. They still have offices, employees and a billion dollar headline from years ago. 🏢 

What they lack is a next round, a buyer or a believable plan. 🧾 

Just after Halloween, we look at zombie startups and how founders and investors can spot them early. 🎃

🔦 Five Signs of the Undead

A fair caveat from The Economist is that startup data is noisy, and some unicorns skip new rounds simply because they do not need the money. 🤷

⚰️ How a Startup Turns Undead

1. The peak photo. A price gets set in the cheap money years, and it becomes the number everyone remembers, whether the round was led from Menlo Park or Mumbai. 🌅

2. The doors narrow. Public listings and acquisitions became harder for many software, fintech and consumer companies, so the usual exits stopped opening. 🚪

3. The money moves. The Next Web reports that AI startups raised about $255.5 billion globally in the first quarter of 2026 alone. Meanwhile, Tracxn data shows Indian startups raised $10.5 billion in 2025, down from $12.7 billion in 2024. 🌊

4. Everyone waits. Down rounds can wipe out the value of employee equity and trigger tough investor clauses, so founders delay. Indian market commentary describes sellers still pricing at 2021 levels while buyers price at today’s reality. ⏸️

🪦 Four Possible Endings

🧭 What Founders Can Do

• 🗓️ If you have not raised in two years, set a date to decide between raising, merging or resetting, and share that date with your board. ⏰

• 🧮 If your last valuation is far above what a buyer would pay, talk to your team about equity early, because options priced against a stale number lose meaning quietly. 🤲

• 📬 If an acquirer reaches out, treat it as real price data and compare it honestly with another bridge round. ⚖️

• 🔄 If your story is not an AI story, lead with profit, margins and payback. Open magazine says Indian investors are prioritising profitability, and Bloomberg says Silicon Valley venture firms are asking for the same hard numbers. 🧱

🔍 What Investors Can Do

Ask these four questions about every company in your portfolio, at least once a year.

🧪 Would a new investor pay the last round price today?

💰 How many months of runway remain without another bridge?

📑 What do liquidation preferences and pay-to-play terms do to the next round?

🪫 Is the founder still energised, and does the option pool still mean something to the team?

Use the same test on your Indian and US holdings, because the pattern looks alike on both sides. 🌐