HACKER Q&A
📣 sebastianconcpt

How is to fail “safely” a startup that got a seed investment?


I'd like to understand better two things:

1. the steps involved or any detail regarding to form a criteria on when to shutdown a startup that did managed to raise an initial seed round, got some validation but isn't growing.

2. Assuming the shutdown is decided, how it's done safely in a way that minimizes pain for all the parts involved. What steps are involved?


  👤 ioblomov Accepted Answer ✓
I think this all rests on your definition of safe. So let’s consider it from the perspective of each affected party. I’m thinking…

1. Customers would want, at minimum, an alternative solution; the smoother you make the transition for them, the better.

2. Employees would appreciate a good severance and referrals to similar roles.

3. Investors would be content with their principal reimbursed.

As a founder, I could walk away with a clear conscience having done, or at least having made genuine efforts to achieve, the above.