[ithinkinstereo]

The company can continue to operate, but that'll probably depend on the equity structure. Not a lot of incentive for founders and key employees to stay-on and manage a "lifestyle" business if they only hold a minority stake in the company. In that scenario, I think the investor-owners would probably want to recoup some/all of their investment quickly in a sale to a competitor rather than slowly over-time by milking and growing cashflow.

[pc86]

Do founders typically own a minority stake in VC-funded businesses? Even a lifestyle business may be able to throw off several million a year in disbursements beyond payroll. Sure if you own a fraction of a percent that's not much money but if you own 20% of a company disbursing $2MM+ every year that can fund quite a bit.

I know VCs are aiming for home runs and 10x+ returns but trying to get someone to shut down a business like that seems short-sighted.

[rdiddly]

Absolutely - I had to rub my eyes and make sure I just read that a sustainable, profitable business (by that metric already more successful than most startups) is being referred to as a "zombie" etc.!

[StudentStuff]

Anything that isn't a unicorn is a zombie if its received VC funding. Its a good reason to not take on VC unless your in a market that can magically meet the extreme growth expectations that are tied to that lump of cash.

[jacquesm]

If a company is throwing off profits like that (as dividends, presumably) they are in absolutely no risk of being shut down.