CRAGSI Launches Revolutionary Startup Restructuring Platform, Transforming 75% Failure Rate in VC-Backed Companies

Integrated AI-powered solution delivers high success rate positioning financially and strategically challenged startups for growth and follow-on funding

SAN FRANCISCO, Sept. 11, 2025 (GLOBE NEWSWIRE) -- CRAGSI (Corporate Repair and Growth Strategies, Inc.) today launched as the first integrated restructuring firm of its type, designed primarily for VC-backed startups and addressing a critical gap in the $730+ billion venture capital ecosystem where 75% of portfolio companies never return cash to investors.

CRAGSI's proprietary turnarounds.ai platform and unique team, which includes two former Wall Street portfolio managers, a court-appointed restructuring and financial advisor, a global leader in crisis communications, and a specialist at unlocking value from intellectual property , achieved an exceptionally high success rate as they test-cased the idea throughout 2024, ultimately positioning clients for growth, including follow-on funding, achieving portfolio company restructurings of $38MM+ in liabilities eliminated at an average of 6.½ cents on the dollar.

"Sadly, the venture capital community has accepted a 75% failure rate as inevitable. But leveraging techniques from my days as a Special Situations Portfolio Manager at a major Wall Street firm, our team at CRAGSI is proving that a high failure rate across portfolio companies doesn’t have to be accepted. LPs can and should demand more, because we’re often able to help struggling VC portfolio companies, demonstrating that despite their uniqueness, with the right strategy and skill, they’re just as capable of undergoing successful workouts as other illiquid entities," said CRAGSI’s CEO and core founder, David Groshoff. "Our integrated approach transforms what others see as inevitable failures into more valuable portfolio assets, extending runway, alpha, and optionality for VC portfolios and the startups inside them. "

Addressing a $730 Billion Problem

Harvard Business School research shows VCs "bury their dead very quietly," with every 7-year cycle presenting $2.4-5.1 billion in restructuring opportunities. Traditional solutions typically focus on liquidation and dissolution, resulting in complete write-offs for investors and damaged reputations for startup founders.

Distinctly co-founded by a boutique corporate law firm, CRAGSI's "vertical keiretsu" model combines strategic, financial, accounting, technical, operational, crisis management, and people expertise under one roof, enabling parallel workflows that accelerate decision-making. Combined with the company's turnarounds.ai™ platform, CRAGSI can extend a startup's runway by months in mere days and weeks, compared to traditional approaches requiring significant multiples of that.

Proven Results

CRAGSI's track record demonstrates the effectiveness of its integrated approach of a core team displaying complementary but non-redundant skills. The company recently helped a Bay Area synthetic biology company with only weeks of runway remaining to reduce over $30MM in liabilities at just $0.059 on the dollar while positioning the startup for a successful Q4 2024 equity round. Similarly, a Bay Area AI company eliminated $7.5MM in liabilities at less than $0.09 on the dollar and successfully completed a new equity round in Q3 2024.

The impact extends beyond financial metrics. "From crushing liabilities to a successful Series B, CRAGSI’s team made what seemed impossible into reality," said one Bay Area CEO whose company was a CRAGSI client. Dr. Alex Lorestani, Founder & CEO of Geltor, added: "We wouldn't be here without you." These results illustrate the CRAGSI team’s ability to transform distressed situations into stable growth opportunities, preserving and maximizing value for founders, investors, and other key stakeholders.

World-Class Team

CRAGSI's leadership combines decades of experience across multiple domains:

• Former Wall Street portfolio managers with $6B+ assets under management
• MBA, CFA®, CPA, JD, and Tax LLM credentials
• Court-appointed financial advisors, each with 25+ years restructuring experience
• MIT-trained PhD in engineering + MS in Biochemistry with deep-tech startup expertise
• USPTO-registered patent practitioner with experience collaborating at a startup with a Nobel Laureate in the sciences
• Global leader in crisis communications
• Skilled Human Resource and People professionals with PHR® and other credentials
  

The company often operates strategically with the colloquially known “GAU LLP” law firm that, along with Scott Telford and Jarett Abramson, co-founded CRAGSI in an effort to offer CRAGSI clients with near-comprehensive professional guidance.

Aligned Incentives Drive Results

Unlike traditional hourly or flat-fee billing models, CRAGSI's compensation is flexible and offers clients the opportunity to choose from compensation models that align CRAGSI’s compensation with a client’s particular desired outcomes. At times, the company takes equity positions and can defer significant compensation until demonstrable value is delivered to clients.

With increasing market distress and traditional solutions failing to meet VC fund managers’, founders’, and startups’ needs, CRAGSI's launch addresses a critical gap in the venture capital, esoteric, and illiquid asset ecosystem.

The company's proprietary AI-enhanced approach and proven methodology provide portfolio optimization tools that extend beyond initial investment selection, offering a strategic alternative to the traditional binary choice between continued funding or liquidation. Rather than claiming to have “the one” solution for every challenged startup, CRAGSI quickly presents clients with a suite of options and likely outcomes, along with a recommendation and rationale as to which course of action is likely to be the most value accretive.

About CRAGSI

Corporate Repair and Growth Strategies, Inc. (CRAGSI) is the first integrated restructuring firm designed specifically for VC-backed startups. The company combines strategic, financial, accounting, technical, operational, crisis management, and human capital expertise with proprietary AI technology to deliver rapid turnarounds, restructurings, and liquidity events that are value accretive and create growth opportunities primarily for VC-backed startups, their investors, and other stakeholders. CRAGSI will operate from the San Francisco Bay Area, Boston, New York, Orange County, Cincinnati, Salt Lake City, and Raleigh-Durham.

For more information, visit www.cragsi.com.

Media Contact:
Christina Ra, CRAGSI
christina@cragsi.com

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