In a notable development in the startup ecosystem, SimpleClosure, a platform dedicated to simplifying and automating the often bureaucratic and complex process of shutting down startups, has announced a successful pre-seed funding round of $1.5 million.
The investment round, which comes during an era where startup closures are seeing an uptick due to shifting economic dynamics and heightened venture capital challenges, was co-led by Michael Vaughan and Jon Pomeranz of Vera Equity, and Rex Salisbury of Cambrian Ventures. The round also saw robust participation from an array of founders and executives of high-profile, SMB-focused startups.
Dori Yona, the Founder and CEO of SimpleClosure and a three-time founder himself, recognized the overwhelming frustrations founders faced during the shutdown process. Recounting his own experiences, Yona said, “It felt like I was the first founder ever shutting down a company in America.” He was driven to create SimpleClosure after being tasked with creating a "shutdown analysis" during one of his previous ventures, and found the process of gathering information on business dissolution overly complicated and opaque.
"Most startups fail. That's a necessary part of innovation. However, shutting down a business shouldn't be a burdensome procedure, leaving founders in doubt about legal repercussions or future tax notices," remarked Rex Salisbury, Founding Partner at Cambrian Ventures. "SimpleClosure ensures that the shutdown is not only quick but also devoid of the usual emotional, financial, and legal intricacies."
Indeed, the statistics are grim for early-stage startups. Crunchbase data from July 2023 showed that venture funding had declined by a significant 53% year-over-year. For startups not able to secure funding within a two-year cycle, the future looks challenging. More than 40,000 startups which had their last funding round in or before 2021 might soon be looking at closure.
SimpleClosure employs a combination of fintech, AI, and legal tech innovation to cater to the unique needs of each company's shutdown. The platform assists in resolving all remaining obligations, be it with customers, state agencies, or team members. Remarkably, more than 75% of SimpleClosure's clientele, spanning from fintech to healthcare sectors, have transitioned to building new companies.
Elie Toubiana, who had to close down Carbon Payments earlier this year, attests to the efficiency of SimpleClosure. "Their team handled all complexities with professionalism and transparency. SimpleClosure made the challenge of closing my business manageable, letting me focus on my next venture," he stated.
In the wake of the successful funding round, SimpleClosure aims to expand its core team and further scale its groundbreaking product. The platform's goal remains clear: to be the go-to solution for founders navigating the challenging terrain of business closures, ensuring they can swiftly move on to their next entrepreneurial venture.