Zombie Fund

A zombie fund is a venture fund past its prime that is still technically operating (managing existing portfolio companies) but has little realistic prospect of returning meaningful capital to LPs. Zombie funds exist because fund life agreements make it difficult to liquidate funds prematurely — the GP continues to collect management fees while managing a portfolio unlikely to generate returns. Signs of a zombie fund: the fund is 8-12+ years old with no significant exits, the remaining portfolio companies are stagnant, the GP has moved on to raising a new fund while providing minimal attention to the old one, and LPs have largely written off the investment. The zombie fund problem is a structural feature of the 10-year fund life model — bad vintages can drag on for years.