the science of shutting down... well - 5/21/26

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📰 Today's Edition: the science of shutting down… well

Ever notice how every founder you know has a fundraising war story… but almost nobody talks about the other side?

You know, the part where things don't work out. The wind-down. The "what now?"

It's the most common founder experience nobody prepares you for. Over 90% of startups fail. And in Q1 of this year, the number of companies shutting down was 2.6x what it was a year ago.

So today, we're talking about the science and the strategy of shutting down well.

Meet The Shutdown Whisperer

Today's learnings come from Dori Yona, co-founder and CEO of SimpleClosure.

Dori didn't set out to become the go-to expert on closing companies. He stumbled into it. While running his previous startup, a board member asked him to produce a "shutdown analysis." The process was so messy, so opaque, so weirdly manual, he thought: wait, this is how we do this?

That frustration became SimpleClosure.

Three years later, the company has raised over $20 million from investors including Infinity Ventures, TTV Capital, Anthemis, and Carta. They've helped thousands of founders close their companies and returned over $200 million to stakeholders that would've otherwise been stuck in zombie companies.

Dori knows what it’s like to be the founder. What founders learn the hard way that you can learn the easy way (right now, by reading this).

Let's break down four insights from Dori that every early-stage founder should keep in their back pocket even if (especially if) you never plan to use them.

Ready?

1. You probably know earlier than you'll act

When Dori asks second-time founders what they'd do differently, almost all of them say some version of the same thing:

They held on a little too long. Hoped for a turnaround. Bet on a fundraise that didn't come. And in the process, they burned through extra time, money, and energy they could've saved for their next thing.

💡 Okay, so what?: Your gut is usually right. The problem is your gut tells you months before you're ready to listen.

This isn't about being a quitter. It's about respecting the math. Every extra month you burn trying to "save it" is a month you're not building the next thing — or returning capital to investors who could redeploy it.

✅ Action item: Set a "trigger metric" with your co-founder before things go sideways.

Pick a number — runway under X months, growth rate below Y, churn above Z — that automatically triggers a real conversation about the path forward. Not "should we shut down?" Just "should we be making different decisions?"

You can't trust your in-the-moment judgment when you're emotional and exhausted. Your past, calmer self can.

2. Going dark is the worst possible move

Here's a quote from Dori that should be tattooed on every founder's brain:

Think about how this works in any other relationship. You're dating someone. Things get rocky. They stop responding to texts for three weeks. Are you reassured? Or are you spiraling?

Investors are no different.

💡 Okay, so what?: Your investors don't expect perfection. They expect communication. When you ghost the board chat for a month because things are on fire, you're not protecting them, you're just removing yourself from the team that could be helping you.

When investors hear from you when things are hard, they can do useful things — brainstorm a pivot, restructure, line up a bridge round, help you think through a soft landing.

When they don't hear from you, they imagine the worst. And they're often right.

✅ Action item: Write the hard update before you want to.

Set a calendar reminder. Send the board update on the same day every month, even (especially) when the news is bad. Use this template:

• What's working: [one thing]

• What's not: [the honest version]

• What I'm thinking about: [the call you're considering]

• What I need: [specific ask, or "nothing right now"]

Done. Five minutes. Investors stay in the loop. You stay sane.

3. A clean failure is the new flex

A few years ago, a failed startup on your resume was something you'd soft-pedal in your next pitch.

Not anymore.

Dori shared this story: there's a founder out there whose investor wants to back them for the third time.

• Company one: exited.

• Company two: shutdown.

• Company three: investor writing a blank check.

Why? Because that investor watched them handle both the highs and the lows out in the open. A clean, professional wind-down, prioritizing creditors, returning capital where possible, communicating with everyone, proved out their judgment more than a pure success story would have.

💡 Okay, so what?: How you close a company is a sales pitch for your next one.

Investors talk. Employees talk. Vendors talk. The way you handle a hard ending sets the tone for every relationship that comes after including the ones that fund you next.

✅ Action item: If you're winding down, make a "stakeholder map" before you do anything else.

Write out every group affected, investors, employees, customers, vendors, advisors, and decide what each one needs to hear, when, and from whom. Then over-communicate.

The founders who get the next yes? They're the ones who, two years from now, still have warm relationships with people from the company that didn't make it.

4. Don't let what you built evaporate

Here's a wild stat from SimpleClosure: across the millions of companies that dissolve every year, there are trillions of dollars in assets just… disappearing.

Source code that took two years to write. Customer data. Operational playbooks. Specialized hardware. Domain names. Patents.

When most companies shut down, all of that goes in the dumpster. The laptops get wiped. The GitHub repo goes private forever. The domain expires.

This is the gap SimpleClosure's new Asset Hub is trying to close. It's a marketplace where founders can sell off the stuff they built instead of letting it rot.

The timing is interesting. AI companies are ravenous for real-world codebases and workplace data to train their next generation of models. What used to be worthless after a shutdown might actually be worth real money in 2026.

💡 Okay, so what?: Even when you're going strong, the stuff you're building has more value than you think.

Most founders can't tell you what they actually own. The trademark situation. The domain portfolio. The data they've collected. The IP. They just kind of… make stuff and hope.

✅ Action item: Take 30 minutes this quarter and make an asset list.

What does your company actually own? Code, data, hardware, IP, domains, brand. Where is it stored? Who has access? What's the rough value?

This is good hygiene whether you're going up, down, or sideways. It also makes you sound a lot sharper in your next investor meeting.

Why This Stuff Works

These four principles aren't really about shutting down. They're about being a grown-up founder who treats every part of the company-building experience with care including the parts you hope you never need.

The bigger shift Dori is pointing at: founder culture is finally getting more honest about the fact that most startups don't make it. Shutdowns are moving from shameful-secret territory into just… a thing that sometimes happens, handled with professionalism.

So build like you're going to win. But plan like you might not. And remember:

The founders who get the next yes are the ones who handle the downside as carefully as they pitched the upside.

Until next time,

Dunky, the "hippo and unicorn whisperer” hippocorn

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