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Why VCs are investing in startups that help other startups shut down
And with an estimated 90% startup failure rate, there's no shortage of potential customers for startups helping other startups shutter.
Martin Pichinson, co-founder of Sherwood Partners, which has been helping startups wind down since the dot.com bust in 2000, puts it like this: “ This industry is going to have more failure, but they [venture capitalists] are smart enough today to cut their losses.” So when Sunset recognized it needed some capital to scale its team, the pair decided to mostly take money from “a lot of prominent angels,” working closely with Hoover on a structure “that will potentially pay out dividends to investors over time.” While SimpleClosure is mainly focused on tech startups (bootstrapped to Series C stage) in industries such as crypto, real estate, healthcare and fintech, Yona noted that the company has been “getting a lot of demand” from non-startups.
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