All posts tagged: SimpleClosure

Why VCs are investing in startups that help other startups shut down

Why VCs are investing in startups that help other startups shut down

[ad_1] In one of the VC world’s greatest ironies, investors have lately been clamoring to back startups that are helping other startups shut down. So whether a VC-backed startup is succeeding or shuttering, investors themselves are finding ways to make returns for their limited partners while also helping founders move on more quickly. And with an estimated 90% startup failure rate, there appears to be no shortage of potential customers for companies who specialize in unwinding other companies. As one seed-stage investor recently bemoaned on X, “Wind downs are sad, emotional and hard enough. Add the legal, financial and logistics work and it doubles the pain. I feel for founders going through this.” Sadly, in 2024, it’s an even bigger-than-typical pain point that needs addressing. While the market was flooded with venture capital in 2021, funding has since slowed globally. For example, Crunchbase News recently identified a sample set of 28 private companies that have a peak valuation of $1 billion or more but haven’t raised a round for years. Some 3,200 private venture-backed U.S. …