Is Rehab the new business model for smart capital?

The Rise of “Hold-Forever” Investors and the Quiet Rebirth of “VC Zombies”

Jacob Kihlbaum
November 28, 2025 • Estimated Reading Time: 7 minutes

Finally a new Friday, and I’ve had a week that hasn’t offered me any calmness. There’s a lot going on, and the kids have kept me busy all the other hours I’ve been able to stay awake. It’s just one of those weeks I guess. But nevertheless, here’s the piece of the week. It’s about a very interesting trend that is 100% aligned with the Capitaholic Anonymous mindset. But first - we need to keep the tradition with this weeks Capitaholic!

Capitaholic of the Week

Kalashi is the Capitaholic of the week, getting drunk on $1B in new funding. They provide the extremely innovative (pause for personal satirical radar to function) functionality of betting on everything from the US presidential election to who will be on the cover of the next Time Magazine issue.

They have grown thousand fold last year to 50 billions in total betting volume. At first - that sounds good (well - that growth rate IS good, but I’m talking about the turnover), but the Gross Gaming Revenue (GGR) on betting companies are around 5-7% of that. At 5 % that’s 2,5 Billions. Up to 50% of that is marketing. Then you have salaries etc. I assume all those costs adds up to more than 2,5 billions since they need another one to keep existing. 4,5x “GGR” is actually pretty average amongst peers, but those peers are profitable.

I wote for a rehab. Or not. Maybe gambling on almost anything isn’t that value adding for humanity.

Source: Kalshi's valuation jumps to $11B after raising massive $1B round | TechCrunch

The quickly growing prediction betting market raised fresh capital from Sequoia and CapitalG, according to someone familiar with the deal.

Venture Capital Zombies

There’s an odd but fascinating phenomenon happening right now in the startup world:

Investors are no longer just chasing unicorns - they’re hunting zombies.

According to a TechCrunch piece this week, a new wave of “hold-forever” investors is actively buying up so-called venture capital zombies - companies that were once venture-backed darlings, but later stalled, plateaued or fell out of favor.

Not to flip them.
Not to IPO them.

But to simply own and run them. Profitably. For a long time.

And that should make every Capitaholic Anonymous perk up.

What exactly is a VC zombie?

A venture zombie is typically a software or SaaS company that:

Raised VC funding during the boom years
Grew fast (sometimes unnaturally fast)
Hit a ceiling
Lost favor with investors chasing the next shiny trend
Never quite “died”… but never truly scaled either

These companies often still have loyal customers and recurring revenue. They’re not failing - they’re just misaligned with the venture capital model, which rewards explosive growth and massive exits, not stable and sensible business building.

For VCs, these companies are disappointments.

For patient, pragmatic buyers? They’re gold mines in disguise.

By trimming costs, simplifying operations and focusing on profitability instead of growth-at-all-costs, some of these buyers have managed to turn sleepy, forgotten startups into solid cash generators with 20-30% profit margins. (The likes of Vimeo, Meetup and Evernote to mention a few).

No hype. No champagne IPOs. Just… business.

And that is exactly where the shift is happening.

Curious about Curious?

Andrew Dumont, founder and CEO of Curious - a firm dedicated to acquiring and reviving what he himself calls “venture zombies” - is convinced that this hold-forever strategy is only the beginning. As AI-native startups push older VC-backed software into irrelevance in the eyes of capital, a new window of opportunity is opening for those unafraid of the forgotten.

Dumont challenges the venture gospel that has long been worshipped: that 80% of companies “fail.” His thesis is simple - that these VC-funds actually produce countless great, functioning, profitable businesses… they just didn’t become unicorns. And in a world slowly sobering up, it might be exactly there that the real value has always lived. They just need to go through rehab.

What this is telling me

This is more than just a quirky investment trend. It’s a signal:

The age of “exit at all costs” is fading.
The age of “value over time” is rising.

For years, founders were told that the only real success was a big raise and an even bigger exit. Everything else was “thinking too small”. But now, the market is quietly admitting something many of us already knew:

A predictable, profitable, boring business is far more powerful than a flashy, fragile one.

Instead of asking:
“How big can this get?”

More people are starting to ask:
“How long can this last?”

I like that. And the answer should be “A lifetime”.

Why this is a win for bootstrappers and Capitaholic Anonymous

If you’ve chosen a slower, more deliberate path…
If you’ve prioritized ownership over valuation…
If you’ve chosen independence over dilution…

This trend is your evidence that you’re not behind the times - you’re ahead of the correction.

Because the companies now being acquired by “hold-forever” investors are often the exact type traditional startup culture once laughed at:

Not sexy
Not explosive
Just useful, sustainable, and profitable

In the old world, that was failure.
In the new world, that is an asset class.

And instead of burning yourself out to impress a pitch deck, you can build something that:

Pays you consistently
Grows slowly and steadily
Serves real people
And stays yours

That is the ultimate anti-addiction mindset.

The real takeaway

The startup world didn’t change overnight.
It just quietly grew up.

Behind the headlines, something revolutionary is happening:

Stability is being rebranded as success.
Ownership is being revalued.
Longevity is becoming the new growth.

The “zombies” being rescued today are proof that real businesses don’t need permission from VCs to be valuable.

They need time, discipline, and people who understand that a good, living business doesn’t have to die just because it didn’t become a unicorn.

Andrew Dumont is not afraid of too much competition though.

Turning profits out of stagnation isn’t easy. “It’s a ton of work,” he said.

Yes, that’s Rehab.

That’s it for this week. Thanks for reading. Hope you enjoyed this weeks piece.

I don’t know if I’m in a capitaholic-anonymous-filter-bubble or if the tide is actually turning? Feel’s like real business value is starting to be valued again, and not only growth.

/Jacob Kihlbaum

Capitaholic Anonymous

Is Rehab the new business model for smart capital?

Subscribe to keep reading

Keep Reading

CAPITAHOLIC