It is time this was called out. But this is not a collective responsibility. This, like all other decisions that fall under the general heading of ‘Do the right thing’ sits squarely with the CEO.

Just as taking VC money, or money from friends or family, carries with it a moral obligation to use that money wisely, taking money from customers carries a deeper obligation. Your promise to them was to solve a problem, not create one.

The CEO needs to take singular ownership of this responsibility — as he/she should for taking investment — and with that responsibility comes the reward of customer success and repeat business and a company less dependent on external investment.

I have written elsewhere about the benefits of taking risks, but taking risks with your customer’s money is not a decision you should take lightly. The impact on a customer of a bad buying decision is usual greater than the impact on a sales person of a lost deal. When a start-up folds, the impact on the customer is significant, but not often considered.