Closing down and moving on: an UNWIND story
At the end of last year, I quit my Techstars job. I loved it, but… let’s just say TechCrunch covered the mass exodus better than I ever could. So, there I was, toying with ideas before heading off to China for a few months (happy to share that adventure upon request). One idea that caught my eye was what SimpleClosure and Sunset were doing in the US: automating the shutdown process for startups. These companies had raised significant funds and reached the magical $1 million ARR mark in under a year by addressing a critical yet overlooked problem [1].
The Ugly Truth
Most startups fail. While you can start a company in minutes today, shutting one down takes months, a heap of cash, and more headaches than you can count. As an early-stage investor who loves being the first money in, I’ve seen my fair share of founders hit a dead end. In the tech industry, you can go from hero to zero in record time, and when that pendulum swings the wrong way, founders are often left to pick up the pieces alone. Early-stage funds typically lack the resources to support their founders through these tough times, focusing instead on their few winners. It’s not out of malice; they just play by the rules of the (“Darwinian”?) game they are in.
So much has been done in the UK for starting your business and raising money [2]. Yet, the process of closing down a startup is still paved with inefficiencies, lack of transparency, and little to no support for founders. It’s a legacy industry crying out for digitization and automation. Thus, the idea of UNWIND was born. Our mission? To help founders close down their startups with the right support and enable them to move on to their next chapter faster. Our north star? To make the shutdown process transparent, fair, and compassionate.
Have you ever checked out the websites of most insolvency practitioners? They inspire about as much confidence as a second-hand car shop [3]. These are supposed to be your trusted partners during one of the toughest times in your career, yet their digital presence screams anything but. Turns out most are spending fortunes on Google Ads to generate leads, promising pricing and timelines that few actually meet.
Non sequitur: In December, I had a casual chat with my friend Aneesh before jetting off to a place I had carefully selected for its lack of internet or telephone coverage. He’s a four-time founder and angel investor, and he instantly got the problem. While I was away, he started digging into it and talking to some insolvency practitioners and founders. By the time I got back around mid-March, we were ready to roll up our sleeves and tackle this head-on.
The Name Game
Flatline Ventures? Not quite the vibe we were going for. You know you’re in business when you nail down a name. Credit for ‘UNWIND’ goes to my partner — it just clicked. Short, memorable, and with a fitting double meaning: to unwind a company or relax after a tense period. Perfect.
We launched a simple website, started indexing on Google, and created content to drive traffic. We began conversations with founders facing tough decisions, built a comprehensive FAQ section, wrote some (insightful?) articles, and spoke with several insolvency practitioners. I even contemplated taking the notoriously difficult insolvency practitioner exam for a moment.
We had our good days — validating the need for a better solution through discussions with VCs, founders, and insolvency practitioners. The current practices feel like they date back centuries. I wouldn’t be surprised if they originated around the time of limited liability companies — basically created during the Industrial Revolution to de-risk private enterprise, so you wouldn’t need to marry off your daughters in an emergency or send your wife to live with a distant relative in the countryside if things went south.
But there were also bad days. Our Customer Acquisition Cost (CAC) was sky-high, and there were limited ways to bring it down. This led me to create a chatbot (MIRA™) and a financial simulator to help founders navigate the shutdown process without spending hours on calls and back-and-forth messages. Despite this, it quickly became evident that our Lifetime Value (LTV) would remain low. Shutting down a startup is ideally a one-time event, making our product infrequent[4] without the high price tag to justify it.
Additionally, in the UK, appointing an insolvency practitioner is almost always mandatory [5], adding complexity, time, and cost. Their fees are capped, and everything charged during liquidation (voluntary or otherwise) must be reported and justified. Liquidation is heavily regulated, making it difficult to scale as in the US, where the process can be more streamlined and flexible. Sunset and SimpleClosure, from our understanding, do most things in-house. That simply would not be possible in the UK.
And Now What?
When evaluating a new product or early-stage business, I rely on my version of Design Thinking: desirability (do people need this?), feasibility (is it technically possible?), viability (does it make financial sense?), and scalability (can it grow?). Here’s how UNWIND stacked up:
● Desirability: There is a clear need for a straightforward, transparent, and empathetic solution tailored to startups. Shutting down a B2B SaaS isn’t like closing a bakery. Check.
● Feasibility: It boiled down to building an automated workflow with access credentials and solid document storage and security. We weren’t reinventing the wheel here. We also found insolvency practitioners willing to partner with us. Regulatory hurdles? Not a walk in the park, but doable. Check.
● Viability: High CAC, low LTV, and tight margins make financial viability a challenge. Our product is highly infrequent without the payoff.
● Scalability: The plan was never to raise VC funding or breed a mystical animal. Still, we needed a future path with enough market potential to justify our time and a sustainable business model. Without a high price tag or frequent use, scaling seemed difficult. The UK’s regulatory environment further complicates matters.
We scored two out of four, not exactly stats that justify going all-in. This realisation took a few days to sink in, but the conclusion was clear.
Then, Aneesh floated the idea of offering UNWIND as a free resource, an idea I initially resisted but soon fully embraced. We spent hundreds of hours educating ourselves, speaking with potential customers, writing articles, and developing products. The one I’m most proud of? MIRA™. Not a big deal, but I had to jump through a few technical hoops to get it to answer exactly as I wanted. The need for an unbiased tool is clear, so making all these resources available to founders made sense to us.
As of today, UNWIND is a free resource. Our mission remains the same: to help founders navigate the difficult process of shutting down a startup, providing a supportive community (Join here), and alleviating the stigma associated with failure.
To know more, visit UNWIND Ventures.
Notes
[1] SimpleClosure raises $1.5M in less than 24 hours (Techcrunch).
The business of winding down startups is booming (Pitchbook).
Why VCs are investing in startups that help other startups shut down (Techcrunch).
[2] You set up a business in less than 10 minutes on gov. uk. Companies like Seedlegals and Odin have done a lot to simplify the startup’s early days and raising capital.
[3] I actually have the utmost respect for Ling: 1) she is hilarious, and 2) she runs a very tight business.
[4] I have a passion for getting my head around the economics and habits of infrequent products. Here is a good article if you are not familiar with the notion. https://www.reforge.com/blog/iced-theory-growing-infrequent-products
[5] The only exception is in the case of a strike off the registry or going dormant.
[6] House of Light, Mary Oliver.
