While few plan for the demise of their startup, it’s something that many face. In this episode, CJ is joined by Dori Yona, co-founder and CEO of SimpleClosure, to unpack the financial, legal, and emotional complexities of shutting down a company. Dori explains the options available when a company is running out of cash, what bankruptcy actually means, and the importance of budgeting for the end. The conversation covers acqui-hires, dissolution, returning capital to investors, hidden liabilities, legal pitfalls, tax implications, and more. Dori breaks down the differences between shutting down corporations versus LLCs and the timelines involved. They also discuss how to break the news to investors and why perseverance is sometimes overrated.
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FOLLOW US ON X:
@cjgustafson222 (CJ)
@DoriYona https://x.com/doriyona (Dori)
LINKS:
SimpleClosure: SimpleClosure.com
LinkedIn: https://www.linkedin.com/in/dori-yona-b8369877/
Email dori@simpleclosure.com
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TIMESTAMPS:
(00:00) Preview and Intro
(01:44) Sponsor – Tropic | NetSuite | RightRev
(05:32) The Inspiration Behind SimpleClosure
(08:25) Three Scenarios When a Company Is Running Out of Cash
(11:32) The Complications of Shutting Down a Business After Selling It
(13:38) What Bankruptcy Actually Means and the Different Types
(16:34) Sponsor – Planful | Brex | Vanta
(20:16) Giving Money Back to Investors and the Pref Stack
(24:31) How To Budget for a Shutdown
(27:15) The Time It Takes To Shut Down a Business
(29:24) SimpleClosure’s Business Model: Serving Customers That Churn
(32:00) The Velocity of SimpleClosure’s Transactions
(36:09) What “Piercing the Corporate Veil” Means
(41:27) Shutting Down Corporations Versus LLCs
(45:36) The Seasonal Nature of Startups Shutting Down
(47:49) Communicating a Shutdown to Your Investors
(54:35) Knowing When To Persevere and When To Move On
(59:53) Wrap
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