Startup wind-down services are seeing rapid growth as failed startups look for help shutting down. Pitchbook: On the phone with a founder who recently wound down his seed-stage software startup, I asked him what his plan was next. Having laid off all of his employees in autumn of last year, he was the last man standing: tasked with the thankless job of shutting down the company, returning capital, and dealing with tax documents. To handle the bureaucracy, the founder used Sunset, one of the companies that sprung up last year to respond to the burgeoning industry of failed startups.

In a sign of the times, such wind-down startups are growing rapidly. Sunset saw 9x quarter-over-quarter revenue growth and a 65% monthly customer growth rate between November 2023 and January 2024. Competitor SimpleClosure, which closed a $4 million seed round this month led by Infinity Ventures, has passed the $1 million mark in annualized revenue and also recorded a monthly growth rate of over 50% in the same period. Since its public launch in September, the startup's revenue has increased more than 14x.

Even larger startups are interested in the additional help. "We've now had multiple companies that have become customers that have raised tens of millions [in venture funding]," said Dori Yona, co-founder and CEO of SimpleClosure. In early February, equity management platform Carta joined the bandwagon: CEO Henry Ward announced in a blog post a new startup shutdown service, Carta Conclusions. "[T]he work of dissolving a company is exceptionally unpleasant. It is also, by definition, zero-value to the founder, the company, and the world," Ward wrote. Carta's entrance could disrupt its competitors, given its existing relationships with a large customer base of startups and access to internal startup data on cap table management, which could help it to accurately target prospects. Founders never want to think about the possibility of failure, but the vast majority of startups never make it to a successful liquidity event.