Chapter 40It's Okay to Shut it All Down, But Do it On Your Own Terms

Startups should not be a trap, and by all means it is not a life sentence that you have to serve until your last dying breath. Sometimes the only option if no potential buyers are found and cash balance is low, is to shut down the company. There is no shame in that, in fact, most startups die. However, do it on your own terms.

What does that mean? Do not let the bank be the one shutting you down because you couldn’t make payroll. Do not let the board fire you because you couldn’t see the writing on the wall and wanted to run the company to the ground. Do not let your customer find out that you are out of business because your app or APIs all of sudden stopped working without prior warnings.

Instead, discuss this with your board and get a consensus. Check in with your lawyer on proper procedures if the goal is to shut down the business. Get the lawyers to draft a wind-down plan and thoroughly list out the action items. Inform your employees, your vendors and customers and what this means for them.

This way, you still get to write your own eulogy and life still can go on after that.