[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Restructuring__ [@Restructuring__](/creator/twitter/Restructuring__) on x 38.6K followers Created: 2025-06-19 23:12:16 UTC 2) Misaligned Incentives & Zombie Unicorns Gurley then turns to the persistence of inflated valuations inside the private market. He observes that roughly a thousand private companies still tout valuations above $1bn, even though those marks were set back in the exuberant days of 2021. He labels these companies as “zombie unicorns” and estimates they have absorbed ~$200 to ~$300bn of capital, representing nearly $3tn of LP exposure. LPs have mentioned to him that their venture allocations have almost doubled, rising from about 5-7% of assets to about 10-15%. Gurley stresses that most 2021 “zombie unicorns” are hardly growing, yet nobody wants to reprice them because the accounting that sustains them rests on circular incentives. GPs both manage and mark the assets, and many earn fees, or even additional bonuses on those paper marks, so writing them down is not in their best interest. Founders also defend these sky-high valuations, as their paper wealth is primarily based on the last round. Liquidation preferences further complicate the picture, as if a company raises $100mm at a $1bn valuation, but later sells at $200mm, investors take their $100mm, drastically reducing the net worth of founders. The result, Gurley warns, is a coordination failure where every participant gains from keeping marks high, presenting a dire view of the market XXX engagements  **Related Topics** [$300bn](/topic/$300bn) [$1bn](/topic/$1bn) [chapter 11](/topic/chapter-11) [Post Link](https://x.com/Restructuring__/status/1935838069103685711)
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Restructuring__ @Restructuring__ on x 38.6K followers
Created: 2025-06-19 23:12:16 UTC
- Misaligned Incentives & Zombie Unicorns
Gurley then turns to the persistence of inflated valuations inside the private market. He observes that roughly a thousand private companies still tout valuations above $1bn, even though those marks were set back in the exuberant days of 2021. He labels these companies as “zombie unicorns” and estimates they have absorbed ~$200 to ~$300bn of capital, representing nearly $3tn of LP exposure.
LPs have mentioned to him that their venture allocations have almost doubled, rising from about 5-7% of assets to about 10-15%. Gurley stresses that most 2021 “zombie unicorns” are hardly growing, yet nobody wants to reprice them because the accounting that sustains them rests on circular incentives.
GPs both manage and mark the assets, and many earn fees, or even additional bonuses on those paper marks, so writing them down is not in their best interest. Founders also defend these sky-high valuations, as their paper wealth is primarily based on the last round. Liquidation preferences further complicate the picture, as if a company raises $100mm at a $1bn valuation, but later sells at $200mm, investors take their $100mm, drastically reducing the net worth of founders.
The result, Gurley warns, is a coordination failure where every participant gains from keeping marks high, presenting a dire view of the market
XXX engagements
Related Topics $300bn $1bn chapter 11