Dead Cat Bounce

A dead cat bounce in the startup context describes a temporary uptick in a company's metrics, valuation, or fundraising trajectory before it resumes a declining trend. The phrase originates from stock market trading but applies when a struggling startup shows brief improvement — slightly better monthly revenue, a new customer, or an uptick in user engagement — before the underlying problems reassert themselves. VCs who have seen many portfolio company trajectories are attuned to distinguishing genuine inflection points from dead cat bounces. Indicators of a true recovery vs. a bounce: sustainable customer retention improvement, structural changes to the business model, new leadership, and repeatable growth signals rather than one-time events.