I’ve been thinking a lot about death lately. Not in a murderous serial-killer-y kinda way, but more in the contemplative, all things come to an end sense. Now I know I promised relentless optimism in the new year edition of this newsletter but hang in there with me, I promise the topic of death is more relevant and less morbid than it sounds. But before I talk about endings, let me talk about beginnings and how I got here.

[Cue Fresh Prince theme music]

My clients are typically venture-backed founders. Whilst they might turn up at my door for a whole host of reasons, you could think about categorising them into those who are on the up e.g. company has just raised money and is growing rapidly; and those who are on the down e.g. company, or they, are struggling. But it might be fairer to think of it as an erratic pendulum. The only real certainty is change. And in amongst the ups and downs it’s inevitable you’ll see your share of ‘failure’ - we know that 90%+ of startups fail so the maths tells its own story.

But statistics are statistics and people are people. Knowing that startups often fail is a very different proposition to sitting with someone in what can be one of the most painful moments of their life - witnessing them doubt their value as a person; fighting off feelings of shame and ineptitude; asking what they should have done differently; and questioning what the future has in store for them now. There’s no doubt in my mind that what I’m witnessing is grief - for the thing that is no longer, and perhaps for the person they hoped they’d become along the way.

So it’s from those beginnings that I started thinking more and more about endings and how we deal with them. And that’s where my friend, collaborator and fellow Evolution Partner, Danya comes in. Like me, Danya works primarily with early and growth stage founders and founding teams. And like me, she’s worked with her fair share of founders wrestling with the end of their startup, or the end of their relationship with it.

Danya and I spent months last year conducting research. We interviewed founders in the throes of their startup failing, those out the other side and recovering, VCs dealing with this in the portfolio, startups like Sunset and Simple Closure building for this problem, and I even facilitated an event in London bringing together former founders.

Perhaps it was our discussions of legacy and meaning, or perhaps it was Danya’s ongoing training as a death doula (someone who supports another person through the end of life) - but whatever got us there, we started to draw the parallels between death in a literal human sense, and death in a startup sense; and to ask what does dying teach us about living?

Now I don’t want to kill your vibe here. I hope your startup goes on to great success - bringing you fulfilment, riches, happiness - whatever it is you hoped for. But the reality is that startups, like people, have an unfortunate habit of dying. And even if ‘death’ in this scenario doesn’t mean the company shuts down; as a Founder, sooner or later, your relationship with the company will come to an end. And that’s often painful. It’s painful if the end is the company shutting down; it’s painful if it’s you moving on; and it’s often painful even if you achieve some sort of exit. One Founder described to me the ‘Instagram vs. reality’ phenomenon of company exits, in which everyone assumes you’ve made life changing money when it’s often not the case.

But facing up to this potentially painful end has some interesting implications for living now:

• Enjoying the experience - as one founder so memorably put it, ‘I don’t want to wake up twenty years from now and realise that in the most exciting moments of my life I was just stressed and fucking out of it the whole time.’ I believe that by facing up to the realities of death, there’s an opportunity to live a richer experience now, framed in the context that nothing lasts forever so we should surely make the most of it. The Confucian saying - we all have two lives, and the second begins when we realise there’s only one - springs to mind.

• Making bigger and bolder decisions - startups are a risky game and founders willing to take bold, positive decisions are often rewarded more in my experience, than those optimising their decisions to try to avoid a bad outcome.

• Zooming out - the startup world is the ultimate short-termist echo chamber. One minute there’s no upper limit on the valuation of an AI company, the next, Deepseek comes along and seems to shatter so many people with ‘unshakeable beliefs’. The King is dead. Long live the King. Zooming out and taking a longer term view is not just good for your mental health, but also for the strategic decision-making of the company.

• Being intentional about meaning and legacy - imagine yourself stood in a large space on your own. Now picture your parents stood behind you. Now your grandparents behind them. Now go back several generations and picture the hundreds of people stood in the room, looking to you as a continuation of them. You are a link in a long chain that started well before you got here and will continue in some form long after you’re gone. What is it that you want to pass on? In Judaism there is a beautiful tradition of writing an ‘ethical will’ (a version of which is this edition’s suggested experiment). Whilst a regular will states what you wish to happen to your worldly possessions, the ethical will outlines the life lessons and values you wish to pass on to those you leave behind. And I believe that generational perspective is useful - it may make you feel more grateful merely for the opportunity to build something to begin with, and perhaps more thoughtful about legacy - what would your ethical will include as a result of being a founder?

The implications of startup death don’t end there. There are also some very practical aspects that you need to be aware of, even in the good times. Hope for the best, but prepare for the worst.

When to start thinking about the end?

The consensus from our research seemed to be when there’s 12 months of runway left (at the latest). Any avenue to either continue or wind the company down will take time, and you’ll almost always be in a stronger position if you consider your options early rather than leaving it late. Planning early also gives you options to make big strategic decisions e.g. we spoke to two co-founders who opted to lay off their entire workforce, take things back to something really basic that they could run just the two of them whilst they pivoted to a different model.

What are the options?

• Raising more capital - generally the route most are aiming for but this of course depends on how the company is doing. In good times this might involve a big round with new investors and an inflated valuation but in tougher times it may involve a bridge or down round from existing investors just to keep the lights on.

• Acquihire - the whole company getting bought by another company and founders/employees getting integrated into the new organisation. This generally comes with an ‘earn out’ i.e. a period of time that the founder will have to stick around in the new company in order to get their full payday. When done well it can be a great outcome for all involved but I also spoke to one founder who walked away 6 months into his earn out, leaving over 75% (equal to millions of dollars) on the table, because he was so unhappy in the new company.

• Asset sale - as opposed to the whole company getting bought, it may be that specific assets are sold e.g. a product that you’ve built. This can be particularly favourable if e.g. your startup has built something of quality but lacks the industry relationships to monetise it effectively. Your product may then be worth far more in the hands of a big industry incumbent for example.

• Dissolution - the full shutdown of the company. It turns down that all the legal and logistical work to shutdown a company is complex, lengthy and expensive. Startups like Sunset and SimpleClosure have spun up in recent times to try to simplify the process

What if the company continues but you don’t want to?

They say that running a startup is like a new company every 6 months and as such, not every one of those new companies is going to suit you as a founder and vice versa. If you have a supportive board and investors then they will often see it as a sign of strength if you acknowledge the circumstances under which you might step back, or into another role; and they’ll often be involved in helping find a great replacement.

One word of warning though - we spoke to one founder who advised being really clear on what your relationship with the company is going to be after that point. Are you still going to play an active role on the board? How in the weeds of the detail do you still expect to be? In his case he described the painful situation in which he tried to stay semi-involved but then had to look on as a lot of decisions were made that he strongly disagreed with.

Who to talk to?

We spoke to some very supportive investors who expressed their desire to be having open and honest conversations early. They also said that if you don’t bring it to them, then at some point they’ll bring it you, which is likely worse.

On the flip side we heard from some founders who shared words of caution about who to listen to - yes some investors are great and supportive, but many are out to serve their own needs and have a very clear incentive to steer for a certain outcome. One founder who felt steered into an acquisition shared, “I felt like i was selling my time and freedom to make our investors happy.” In that period he had one investor he continued to trust but another who he felt betrayed by and who he’s very publicly advised other founders not to work with.

And of course a great coach might help you here - as an informed but unbiased partner to help you navigate the situation.

What next?

The what next of course depends on the manner of the ending. I know Founders who’ve sat out their earn out period in a new company, those who’ve taken leadership roles in larger companies, those who’ve taken a Chief of Staff type of role to another leader they admire, those who’ve gone on to found again, and those who need a long recovery e.g. one founder who burnt out so badly that he’s been hiding out on a boat in Costa Rica for a number of years.

One word of caution from a multi-time founder we spoke to:

So what if you could shed the weight that comes with constant resistance? What if you could stare death straight in the eyes and utter the words, “I’m not afraid of you” What if you chose to be present in the experience and not drawn out of it by the stress? What if you made big and bold decisions unencumbered by fear? What if you were grateful for the lineage that got you here? And what if you were intentional about the person you became along the way?

I for one, would love to see just what you were capable of in that version of the world.

From the archive