There’s an emerging start-up sector helping other start-ups shut down
Companies such as Sunset, SimpleClosure, and Carta Conclusions have been launched in the last month to a year ago.
In a recent analysis for PitchBook, Rosie Bradbury notes that a burgeoning new start-up sector is focused on companies that are helping other start-ups shut down.
Among those that have sprung up recently is Sunset, which saw a 9x quarter-over-quarter revenue growth and a 65 percent monthly customer growth rate between November 2023 and January 2024. One of its competitors is SimpleClosure, which closed a $4 million seed round in February led by Infinity Ventures. The start-up, which publicly launched in September, has already passed the $1 million mark in annualized revenue and also recorded a monthly growth rate of over 50 percent in the same period. SimpleClosure’s revenue has increased more than 14x.
In early February, equity management platform Carta joined the bandwagon, announcing the launch of Carta Conclusions. In a post on Medium, Founder Henry Ward wrote, “Shutting down a company is SO MUCH harder than starting one. It is a lot of work to create employee severance packages, cancel vendor agreements, unwind customer contracts, file IRS dissolution tax returns, tie up loose ends of shareholder liabilities, return money to shareholders, shutdown internal systems and bank accounts, and finally notify Delaware and all registered States of the dissolution.”
Bradbury notes that roughly 55 percent of U.S. start-ups that raised a round between 2020 and 2021 have yet to exit or raise a new round, according to PitchBook data, and many will be facing a cash crunch. The median time between rounds for venture capital-backed companies jumped from 1.27 years in 2022 to 1.51 in 2023.
