Field Reporter: Are they slow-moving, chief?
Sheriff McClelland: Yeah, they’re dead. They’re all messed up.
— Night of the Living Dead (1968)
Here is another excerpt from Venture Capital Journal’s thought-provoking venture capital roundtable with LPs (investors in venture funds):
Clarke: …Three-plus years ago, I put together what I call our “walking wounded” list of [venture] firms, the firms that appear as though they should not be able to raise another fund. We had no expectation we would ever have to make re-up [Ed., reinvestment] decisions for those firms again, but every one of those firms, like a zombie movie, is still out there today, and most of them have raised new funds over the last 12 months. And they have raised them, almost without exception, with over-subscriptions–not including us.
Apparently losing money in buckets, not being uncorrelated with other investments, and being illiquid are not enough to keep the institutional investors managing your pension funds away from investing in broken venture firms.