• Zombie funds are on the rise as private equity dealmaking and distributions slow.
• We asked recruiters about the reputational impact of working at a zombie fund.
• They suggested looking for an exit, especially if you're an investor or fundraiser.

Have you heard the news? A new contagion is turning formerly healthy private equity firms into the walking dead. It's not fungal, like in "The Last of Us," a virus, like in "28 Days Later," nor a magical reanimation like the original Haitian Vodou Zombis.

Instead, it's the result of a dealmaking slump, pickier investors, and macroeconomic conditions that have turned some private-equity firms into glorified estate sales, auctioning off their dusty holdings before closing up shop.

There are many definitions of a zombie fund — but no matter how you slice it, it can be bad for your career.

To some, a zombie fund is one that's passed its investment deadline, but is still holding onto capital to invest. Others say it's a firm that can't raise new money and is stuck managing and selling off its current portfolio. Zombie fund can also refer to a fund that has invested capital but is delaying the process of returning money to investors while it continues to collect management fees.

The phrase has picked up steam amid a multiyear lag in M&A and IPOs that has slowed private equity dealmaking and distributions to investors.

Private markets data firm PitchBook said the number of US funds that haven't made an investment in a year, despite raising money in the last six years, is up 50% from 2021 to June 2025, to 651. Internationally, they're up 40% in the same period to 1203.

We spoke to recruiters about the rise of the zombie funds and what that means for people working for them. Here is what they said.

When to run

Recruiters said employees, especially in certain roles, should start job-hunting at the first sign of zombification, though they warned that not every slowdown signals trouble.

"If they are working at a firm that has no plans to fundraise for the foreseeable future, that is usually their sign to go straight to exploring the market," Jessica Xu, head of investor relations recruiting at Selby Jennings, told Business Insider.

This is especially true for people in fundraising roles, where success means growing the firm's assets under management and building strong and deep relationships with investors.

Bill Matthews, partner at BraddockMatthewsBarrett, said it's also true for people in investment roles because a zombie fund will drag down your investment track record.

"Folks have to pick their head up and move," he said, adding, "On the investment side, you want to have a track record of doing deals and exiting deals, and if there's a zombie fund, that's not going to be the case."

Of course, fundraising has slowed across the board and isn't necessarily a death knell. It's important to differentiate between a slowdown due to market conditions and one caused by dissatisfied investors. Just make sure you're keeping busy during the slowdown, said Lisa Steele, a partner at BraddockMatthewsBarrett.

"You're maintaining relationships and keeping current LPs up to date, which is also critically important to these long-term partnerships," she said, referring to limited partners, the industry's catchphrase for fund investors.

You should also be developing new relationships, which Steele said will prove "hugely valuable when you go back to market."

How to interview

A candidate running from a zombie fund may feel tempted to hide their current situation in a bid to make the candidacy more enticing. That would be a mistake, recruiters said.

Matthews said hiring firms tend to know which of their peers are zombie funds from conversations with investors and other intermediaries.

"It's important for candidates to be as transparent as possible with potential employers about their reasons for wanting to leave their current firm, and working at a zombie fund is an understandable reason," Xu said.

The trick is to do it smartly. Recruiters warned against badmouthing the current employer or divulging confidential performance information. Focusing on personal gain is key, they said.

"Many candidates in these situations feel constrained in their ability to drive growth and create meaningful value for their investors," said Xu, adding that they are "seeking environments where they can contribute more strategically."

By focusing on how you'd benefit from moving to a better-performing fund, you come across as a good player on a bad team. And it's worth remembering that there are worse situations to be in.

"A hiring firm's biggest fear is unknowingly hiring another firm's castoff," Matthews said. "A zombie fund situation is obviously a good and valid reason why someone would want to leave."

• Joan Nguyen co-founded Bumo to help parents book last-minute childcare.
• The app features vetted childcare providers and works similarly to Airbnb.
• The pitch deck has raised $10 million so far, with another $10 million seed round coming up.

Modern life makes it easy to order late-night cars home, book spontaneous vacation rentals, and get lightning-fast takeout. But getting childcare on short notice? For many that's still a pipe dream.

Joan Nguyen founded Bumo, an app that allows parents to book empty slots at local childcare centers, after starting two childcare ventures during the pandemic.

From working with parents, Nguyen said she realized that they often needed what she calls "fractional childcare," such as when their nanny called in sick or something pressing came up at work.

"As a parent, I also felt the pain of not being able to get childcare when you absolutely needed it," Nguyen told Business Insider. "Why is it easier for me to find a dog walker than it is to find a sitter or a nanny?"

Launched in 2024 after raising $10 million, the Bumo app was co-founded by Nguyen and Chriselle Lim. It's a continuation of a joint co-working and childcare center they launched in late 2019, followed by BumoBrain, an online learning platform they created at the height of the pandemic to help working parents.

This week, Bumo is preparing to announce a $10 million seed funding round, led by venture capital firms Offline Ventures and True Ventures, Bumo shared exclusively with Business Insider.

The app, which has about 10,000 users and offers services in 200 locations within 13 states, works similarly to Airbnb. Parents can filter and sift through childcare options from drop-in daycares to summer camps, some of them offering same-day availability.

Nguyen said Bumo also fits in with the consumer demand "to want things instantly," now accustomed to quick bookings and deliveries. Meanwhile, "you see childcare as this kind of monolithic thing that hasn't really changed a lot," she said.

Filling a gap in childcare demands

Bumo aims to offer more convenience and fill a gap in the US childcare system.

Parents are more isolated than they have been in generations, not always being able to rely on family members to help them. Many also can't afford full-time daycare, but still need some part-time childcare options.

To ensure safety, Nguyen said every service listed on Bumo is licensed by their respective state and has a "digital footprint" including past reviews. Bumo staff also interviews with each facility at least once a year (sometimes virtually depending on the provider's location) to make sure that they're up-to-date on background checks and that all staff have proper certifications.

Nguyen said that Bumo only uses original photography and videos for each facility instead of stock photos. Parents can also upload photos in their reviews.

Bumo's next step is to keep expanding in other cities; right now, Los Angeles has the highest number of childcare offerings on the app. The goal is to increase Bumo's density in San Francisco and to introduce its service in New York City.

Read the 16-page pitch deck Bumo used to secure $10 million.

Bumo opens with a positive press quote.

It sums up the key benefit of Bumo: expediency.

Introducing the founding team and each member's accomplishments.

The slide features the team members' experience levels, follower counts, and press mentions.

It defines the app and what makes it stand out.

The slide includes a graphic of the app in action.

It addresses the core childcare problems working parents face.

A simple graphic illustrates the obstacles parents face in securing childcare.

It then shows how childcare providers benefit from the app.

It highlights the practicality of the app: childcare providers have empty slots they want to fill, incentivizing them to use Bumo.

The next slide demonstrates how simple the app is to use.

It uses a similar calendar booking system to Airbnb or Rover.

The deck emphasizes lower costs.

Parents don't have to commit to full programs they can't afford.

Another slide sums up the key benefits for everyone.

It emphasizes the mutual relationship between parents and childcare providers.

The deck then transitions into Bumo's accomplishments.

It addresses how many families currently use Bumo, the number of providers, and the social media reach. It also shows investors the opportunities for growth.

Another slide highlights Bumo's commitment to digital outreach.

It shows a concerted strategy to promote the app in smaller parenting communities on Facebook and Instagram.

The presentation winds down by zooming out on the market.

It illustrates how big the childcare market is.

It draws comparisons to other successful apps.

It also asserts that, unlike the other apps, Bumo has no competition so far.

The second-to-last slide shows Bumo's projected growth.

It includes other methods of revenue and its target numbers for childcare service expansion.

The deck ends with a strong tagline.

It brands Bumo as a company that also cares about parents' well-being and understands their struggles.