October 9, 2024 • 30 mins
In this episode of D2Z, Brandon Amoroso chats with Brendan Mahony, CEO of Sunset, about the critical yet often overlooked aspects of winding down a business. Brendan shares his journey from a Y Combinator alum to navigating business closures, offering a transparent look at the challenges and necessities of responsibly shutting down a company. This conversation sheds light on the legal, tax, and emotional intricacies involved in business dissolution, providing valuable insights for entrepreneurs at any stage.
Here's what you'll learn:
🚪 The necessary steps and considerations for shutting down a business.
📈 The differences between asset sales and stock sales in acquisitions.
🛑 Common pitfalls in the dissolution process and how to avoid them.
🔄 The emotional journey of moving on from a failed venture.
📊 Insights on managing financial liabilities and investor expectations during closure.
Timestamps
🎙️ Introduction to Brendan Mahony (00:00:00)
🛑 Discussing the Importance of Proper Business Shutdowns (00:00:33)
🎢 Brendan's Entrepreneurial Journey and Founding Sunset (00:00:51)
🤔 The Differences Between Asset Sales and Stock Sales (00:01:57)
🔍 The Role of Dissolution in Business Acquisitions (00:02:24)
🚫 Common Misconceptions and Challenges in Business Dissolution (00:03:07)
📉 Impact of Incomplete Dissolutions on Future Endeavors (00:03:42)
📊 Financial and Emotional Aspects of Closing a Business (00:04:51)
📚 Lessons from Failed Ventures and Importance of Closure (00:06:55)
🔄 The Process of Working with Sunset for Business Closure (00:27:58)
📈 Exploring Expansion and Future Directions for Sunset (00:29:34)
Brendan Mahony
LinkedIn - https://www.linkedin.com/in/brendan-mahony-72929385/
Sunset - https://www.sunsethq.com/
Brandon Amoroso:
LinkedIn - https://www.linkedin.com/in/brandonamoroso/
Web - https://brandonamoroso.com/
Instagram - https://www.instagram.com/bamoroso11/
X - https://twitter.com/AmorosoBrandon
Scalis.ai - https://scalis.ai/
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
I'm Brandon Amoroso, and this is the D2Z Podcast
building and growing yourbusiness from a Gen Z
perspective.
Hey everyone, thanks for tuningin to D2Z, a podcast about
using the Gen Z mindset to growyour business.
I'm Gen Z entrepreneur BrandonAmoroso, founder and president
of retention as a service agencyElectric, as well as the
(00:24):
co-founder of Scaless, and todayI'm talking with Brendan
Mahoney, who's the founder andCEO of Sunset, which is a
company that helps companiesshut down.
Thanks for coming on the show.
Speaker 2 (00:35):
Thanks so much for having me man Appreciate it.
Speaker 1 (00:38):
So before we dive into the interesting topics
behind why and how you can shutdown a business, can you give
everybody just a briefbackground on yourself and sort
of how you ended up here?
Speaker 2 (00:51):
Yeah, of course.
Yeah, definitely an interestingjourney to run this company.
But yeah, I went through YCombinator a few years ago, back
in 2018.
So kind of started like a toolfor digital agencies out of
there, ended up selling that toprivate equity.
Kind of immediately startedanother company after.
That should have taken a minutebut, yeah, ended up not working
(01:14):
out, couldn't really findproduct market fit.
So went through the dissolutionprocess.
Knew nothing about it, was verysad and painful and long and
expensive and so, yeah, I meanthat's kind of how we got to
where we are today.
So, yeah, I run a company likeyou mentioned, called Sunset.
We help primarily, you know,tech companies wind down,
(01:36):
handling, you know, all thelegal, tax and operational
aspects that go into adissolution.
Speaker 1 (01:43):
Are there any components to what you do that
are required when a business isgetting acquired versus, you
know, actually like shuttingdown because they're closing the
doors?
Speaker 2 (01:58):
Yeah, it's a really good question.
So you know, especially if youhaven't gone through an
acquisition before, there's alot of different flavors of them
, so a lot of them might be anasset sale actually.
So you know, let's say thebuyer is looking to acquire your
startup.
You know they could do a fullstock sale.
(02:19):
So they're actually literallypurchasing all of the stock of
your entity and you know there'ssome benefits to that.
But you can imagine there are alot of risks, right, if you're
buying the whole entity, you'rebuying all the contingent
liabilities.
So, like anything that comes outof the woodworks, you're now
you're the rightful owner ofthat, and so what a lot of
(02:40):
buyers will do is they'll doasset sales.
So they'll literally just pluckspecific assets and or
liabilities even from yourcompany and just purchase those,
but they'll actually, in theprocess, leave behind, you know,
your corporate shell that hasall the other like we talked
about contingent liabilities,taxes, you know, state agencies,
(03:00):
registrations, all that goodstuff will still be there, and
so, and similarly withacquihires too, right, so when
you know, maybe they're justgetting some employment
agreements, things like that.
So we work with a lot ofcompanies who had great exits,
but yeah, they were in the formof an asset sale or an acquihire
and, yeah, you know, you stillbasically need to go through the
(03:23):
entire dissolution process,despite that?
Speaker 1 (03:28):
Yeah, I don't think that.
Because my exit was an assetsale, I don't think that the
full dissolution process evernecessarily took place.
I probably have the state ofWashington calling me right now
for my employer taxes.
That has not been paid in likethree years?
Um what split, would you say,is like?
Speaker 2 (03:51):
um you know, of the transactions that you see, are
most of them primarily likeasset sales well, yeah, so if
they it, so what's you know thebenefit of a stock sale, let's
say, is you know you don't needto do the dissolution.
The entity was fully engulfedin the acquirer.
So we don't work with, we'rejust not in those transactions.
(04:14):
But I would say probably about30% to 40% of the companies we
work with have some type ofasset purchase agreement that
was executed when they'reworking with us.
So it's a decent chunk havegone through kind of an asset
sale of some kind or acqui-hire.
Speaker 1 (04:32):
I think it's relatively obvious, if you're
selling your business in anasset sale why you would want to
use a business like yours todissolve the entity.
But let's say you're somebodywho you know, everything's just
gone to shit and you know you'rejust like.
Now I still have to deal withit.
And what are some of the like,the repercussions if you don't
(04:55):
handle things appropriately whenit comes to resolving the
business.
Speaker 2 (04:59):
Yeah, we definitely get this question a lot.
So I'll kind of caveat and sayyou know, most of the companies
we work with are venture backedor have some type of you know,
third party investors that putcapital into the business.
And so, using that as anexample to start with, you know,
it's actually pretty, it's notvery cool to just like go zombie
(05:22):
mode, because what a lot offounders don't understand is, as
a venture fund, any of thesetypes of firms, any investors,
they get audited and when theyget audited they need proof that
your company actually shut down.
So, yeah, you might think, hey,I sent an email, whatever we're
shut down, but they actuallyneed that certificate of
dissolution to go to the IRS andsay, hey, yeah, this company
(05:44):
properly dissolved.
So you know, one aspect is that.
So, like this is definitely abig reputational game, you know,
especially in the startup world.
And so it's not investors.
We talked to a lot of investorsand they get really not happy
when folks literally just walkaway.
So that's one be when folksliterally just walk away, so
(06:09):
that's one.
But two, you know you'reeffectively building up a case
against yourself with all thesestate agencies, the IRS, so you
can do that and like are theygoing to go?
You know caveat nothing on thispodcast is legal and tax advice
Are they going to go after you?
You know, probably not, havethey?
Yeah, they've definitely goneafter people for sure, for you
(06:30):
know being extraordinarilydelinquent on their taxes.
Speaker 1 (06:34):
So yeah, got it.
No, that that makes sense.
What are?
You know, what are some of thethings that you took away from?
You know, your previousbusinesses that made you even
want to, you know, embark uponthis as the venture.
Speaker 2 (06:56):
Yeah.
So I mean, you know, goingdeeper in the story, so after my
, you know, after my secondcompany didn't work out and we
dissolved it, it took like twoyears where I was working for
other folks.
I didn't know what I wanted todo.
I didn't know what I wanted tostart and during that time I
started getting texts from likedifferent YC buddies, other
(07:16):
founders, I know, just beinglike hey man, shit is not going
well, like this is bad.
I know you went through thisdissolution, like can you help
me out?
So after like the third orfourth text I was like this is
insane, like it's so easy tostart something.
You know you're going likeStripe Atlas pay like 500 bucks,
takes like five minutes, reallynot the same for winding things
down.
So you know that was kind ofthe journey to get here.
(07:43):
But yeah, I kind of lost threadof your initial question so I
apologize actually.
Speaker 1 (07:50):
What even prompted you to want to start the
business that shuts downbusinesses.
It really is my favoritetagline for a company.
Oh my God.
No, but I didn't think aboutthe asset sales, though, and the
acqui-hires, so it's not likeyou're just a grim reaper here,
like you are helping facilitategreat things as well, too.
Speaker 2 (08:13):
Exactly.
I know it's not all doom andgloom, but you know why I wanted
to do it.
It's when I was helping some ofthose founders you know not not
when we are actually runningthis business it felt really
good, like you know, everyonesays like start companies where
you're solving your own problem.
And this was really, you know,when I dissolved my company.
(08:34):
Personally, like this was ahuge low point in my life, just
in general.
And then I was kind of saddledwith like seven to nine months
of dealing with this shit.
I screwed stuff up in New York.
I had to pay like a few grandout of pocket like a year and a
half later.
It was a disaster.
And yeah, you know, the othercompanies I had were like they
were like dev tools and designtools and it's like sure you're
(08:57):
really helping people maybe.
But for this, you know we'veworked with some real, like you
know we've.
We've worked with some real,like you know we've.
We've heard some stories fromfounders who definitely share
some of them.
But you know, we're goingthrough some really intense
stuff and being able to takethis load off their plates and
let them kind of move on andfind another job, make some more
money start another company.
It's actually extremelyfulfilling, despite it being a
(09:22):
weird space.
Speaker 1 (09:24):
Yeah, no, that makes sense and I think that's not an
uncommon refrain that I've heardfrom other folks on the podcast
that usually the best businesscomes out of whatever your
current thing is that you'redoing your current pain point
and then being able to help andsolve that for other people.
It just seems like you know mynew business is the exact same
(09:47):
case I feel like most people'sis.
It's not like you're justsitting somewhere staring in the
sky and then all of a suddenthis light bulb moment comes to
you.
Uh, like they, they like theywill, will glorify in the movies
.
Yeah, exactly exactly what areyou seeing in the market right
now?
Because you're obviously veryclose to it, you're very
connected with a lot of VCs andinvestors.
(10:07):
It seems like things maybe area bit better right now than they
were necessarily a year, yearand a half ago.
Would you say that's accurateor inaccurate?
I was talking to somebodyearlier today and they were
talking about how it's, you know, interesting to see the
dynamics between the privatemarkets and the public markets,
(10:27):
because obviously the publicmarkets are pretty much instant.
You know you're a publiclytraded stock in terms of pricing
and whatnot, but there'sdefinitely a bit of a lag when
it comes to, you know, venture.
So what are you seeing?
Um, you know, this year and andgoing into next, do you think
things are getting better?
Are they getting worse?
Speaker 2 (10:46):
I think there's still a pretty long tail of the Zerp
era going on.
From what we've seen, there'sstill a lot of companies coming
to us who raise crazy rounds.
2020, 2021, 2022, even that areeither.
You know, it's a mix.
You know some folks come to usand, yeah, they're cash out and
(11:09):
it's a problem.
A lot of folks that come to usand they've got a bunch of money
to return but they've just beentrying taking a lot of swings
at bats and they're just kind ofthey couldn't figure it out,
they couldn't get the product,we couldn't get to product
market fit and they want toreturn that capital.
So I think, from what we'veseen, there's definitely more of
I haven't really heard of toomuch pressure from VCs,
(11:30):
necessarily from founders, but Ithink there is more of an
appetite to return capital insome of those cases and maybe
there wasn't as much back in theday.
But from what we're seeing, atleast again on kind of
venture-backed, primarily techstartup sphere, yeah, it
(11:53):
definitely hasn't slowed down.
It's been only kind ofincreasing, especially as
year-end is coming up.
But I, you know, we're justlike a microcosm of the space,
so not entirely sure.
Speaker 1 (12:06):
Yeah, well, it seems like you know there's still a
lot of lag from 2020, 2021.
That's still sort of sortingitself out, even at the amount
of capital that's going intobusinesses that don't have PMF
yet is significantly less thanyou know the way that it was
(12:28):
going in in 2019, 2020, even2021.
Speaker 2 (12:32):
Oh yeah, big time.
Yeah, definitely I mean so youknow a lot of folks will come to
us.
You know, sometimes it's it'sactually pretty good.
We're the come to us early andthey're and they're still trying
to figure out their options andthey're looking at raising
bridge rounds, going to theirexisting investors, looking to
M&A, things along those lines.
That's always, I think, great.
(12:54):
You know, you've got like ninemonths, cash out, something
along those lines.
It's really good to startthinking about those things.
Things become really difficultwhen you have no time and no
money, cause then you can't sellit.
Shutting down becomes a lotmore complex.
You can't just walk away.
If you're in solvent, you'vegot a bunch of debt obligations,
like it's a lot more expensivethan you think and it's a lot
(13:16):
more time consuming anddifficult and, yeah, you
definitely don't have time toraise capital.
So we definitely been beenseeing more folks come to us
early looking at their options.
But, yeah, a lot of fundingrounds.
We've anecdotally seen a lot ofpeople have term sheets get
pulled at the last minute.
Folks have been trying for six,nine months to raise a bridge,
(13:39):
raise that next round gettingsuper close, but just, you know,
folks pulling out at the lastminute.
So, yeah, we've definitely seena decrease in kind of, you know
, capital going into companiesthat don't have truly, truly
strong growth.
Speaker 1 (13:56):
When it comes to you know, the psychological
component of this whole thing.
You know there's obviously alot of business owners who are
listening to this.
How do you sort of detachyourself and like, how are you
able to detach yourself from thethe personal identity component
of it being, you know, likeyour business and not wanting to
(14:19):
let it fail?
Yeah, because that, I mean,even that freaks me out, even
today with the new business.
You know it, you know it's like, it's like me.
It can't fail.
Like what do you mean?
It could fail, it's impossible.
So how do you like get overthat, that hurdle and what are?
You know, what are some thingsthat you did, what are some of
(14:39):
the things that you've seen someof the founders that you're
interacting with and engagingworking with right now, like you
know, get through that.
Speaker 2 (14:47):
Yeah, it's a really good question.
I mean I wish I had a betteranswer for you.
I mean for me personally.
So what we see a lot of folksdo is like travel.
I don't know if that works well.
That's what I did.
Like I rented a van with mywife.
We like drove with the PCH, youknow.
Did it help?
I don't know, but it was great,great memories, you know, I
(15:11):
don't.
I think the answer is like it'lljust have, like you will feel
that way, right, and I think theonly way to kind of heal that
is just for me was just taking abunch of time and just taking
more swings at bat and justtrying to start a bunch more
companies and playing aroundwith different ideas and just
(15:33):
trying to learn from my hugemistakes of the previous ones
that didn't work out.
But, yeah, I mean I wish I hada better answer, but I don't.
I feel the same exact way.
I just like I can't have thisone fail and it felt awful, like
it felt absolutely terrible thefirst go around.
So, and and after going throughthat like man, does that keep
(15:54):
me up at night?
Just like really not wanting toexperience that again.
So, um, it's a good question,but I, yeah, don't have a good
answer.
Speaker 1 (16:03):
No, I mean hey, hey, listen in a van on the PCH
doesn't sound that bad.
Speaker 2 (16:08):
It's great.
Speaker 1 (16:10):
Yeah, it's sick, I think, the thing that I've been
told time and time again.
Even though it's easy to say it, it's a lot harder to actually
believe it, because if youreally do love entrepreneurship,
then there's always going to bemore businesses.
You know, you're not, and itwas even the same for selling
(16:30):
the first business.
You know, because there is thatpersonal identity attachment,
like there's always going to besomething else, there's just
going to be another one.
So it's not.
It sounds ridiculous, as we'vebeen talking about you know,
having to shut down your companybecause it failed, but there's
a lot of founders that struggleafter they've sold their company
.
Yeah, because they don't haveit anymore and they don't know
(16:51):
what to do.
And it's not, you know, youdon't have the.
There's so much that goes intothat aspect of things as well.
I think maybe we've stumbledinto our next business here with
helping post-exited andpost-shutdown founders with
figuring out how to navigatelife.
Speaker 2 (17:14):
Oh man, I know, I know it is super challenging on
both ends.
I think for me too, probablykind of going back to your
initial question, though,something that was really
helpful which I didn't do a goodjob at at the time was just
talking to more founders who'vebeen through it.
I think a big thing we'retrying to do is just kind of
remove the stigma of this, likethis is a game, you know, if you
sign up for the game, youshould be well prepared, and
(17:35):
we're all well informed thatnine out of 10 don't work out
like that is.
That is the venture math, thatis how this is played, and even
not in venture.
You look at Better BusinessBureau data of SMBs since 1980,
and yeah, it's like 75% ofcompanies are going to fail
within the first five to sevenyears.
(17:56):
So I agree, it's just.
I think what you said istotally accurate If you really
love doing this, you'll be.
You'll just be forced into kindof doing the next one and
hopefully that won't be great.
Speaker 1 (18:11):
You obviously see a lot of businesses that have
failed.
Are there any common themesthat you see or you know?
Mistakes or patterns amongstthe ones that you are having to
you know help dissolve that youwould take away, as you know, a
potential, like you know,insight, or or or learning
(18:32):
lesson, for lack of a better wayto phrase it.
Speaker 2 (18:37):
Yeah, I mean, I think I think there's definitely, you
know, we, we, we do see some ofthe hot industries you know
what I mean and, like you'resaying, kind of lagging
indicators of those.
So we see some betting coming,some crypto, things along those
lines.
So I think you know these areall obvious kind of lessons,
(18:59):
nothing that's going to be newto any listener, but yeah, it's
just kind of jumping on thatbandwagon, especially being kind
of late to it can work in manyinstances but also might not
work out.
We just do see a lot of thosekind of like clumps coming in at
any given time.
But yeah, in general, I think alot of folks we see they just
(19:23):
like raise a bunch of capital,they burn a huge, huge, huge
amount by hiring a ton of folksthat's always what it is and
they're really not making muchmoney.
And so I think our you know mybiggest lesson from that and
what we're doing here at Sunsetis just being extremely, yeah,
(19:45):
extremely aware of our balancesheet and looking at our P&L and
making sure that what we'redoing is profitable and looking
at our unit economics.
And I mean another big thing too, just on the side note, is debt
right, like just, I thinkfounders don't quite understand
that debt can follow you, evenif you raise it through the
(20:13):
business, if you've got personalguarantees on it, if that debt
is secured against any assets,anything like that.
It's kind of no joke, it justpretty.
It's.
Yeah, it just becomes very,very tricky once you're
insolvent.
So you know yeah, and all thekudos to founders that you hear
(20:33):
the stories, the outlier tales,of the folks who have the credit
card binders.
I know the Airbnb guys.
They always talk about that.
They built up all this personalcredit card debt and they have
binders of it and they keptgoing and kept going and they
finally figured it out andthat's awesome.
But you should remember thatthey're one of a billion, they
(20:54):
are so so, so rare and thatstory is cool, but it doesn't
mean you should copy it, youknow, just be aware that, yeah,
it's just, we just see a lot ofthis and it's just, it's really
tough to, it's hard to help out,it becomes a lot harder really
(21:18):
tough to.
Speaker 1 (21:18):
It's hard to help out .
It becomes a lot harder.
I mean, I think the media ingeneral there's a tendency to
for I mean rightfully so,because the story is crazy.
And then that and in some ofthe other stories that you'll
see about the founders, that isnot the norm.
You know.
That's not how most businessesbecome successful.
That's the crazy outlier, whichis awesome.
But like what if one or twothings went a different way?
(21:40):
And then you know it's notairbnb it.
Or you know, even if airbnb didstill exist in some capacity,
it could be a different company.
You know there's, there's abusiness that I'm blanking on.
The name of that basically wasyelp.
Before yelp was a thing butbecause of, like the server
technologies or something youknow, they had to shut down like
a year before Yelp got started.
(22:00):
And then Yelp became what itwas because of timing and all of
those other things and factorsthat go into it.
So you know, it's good to readthe books about Airbnb or to
read the books about some ofthese companies that have these
crazy, like rising from theashes stories, but that's not
(22:20):
necessarily the model that youshould emulate and want to uh,
you know, aspire to be stressedas one.
I can't even imagine howstressed they had to have been
at that point.
Oh my God.
Speaker 2 (22:30):
Oh my God, I know, but I think I think actually
something you know kind of.
Again, going back to yourearlier question, something that
is interesting too is wedefinitely come across a lot of
companies and they'll come to uswinding down and they pivoted a
lot.
They pivoted a lot, you know.
We've talked to some companieswhere, because you know we help
them out with their assets, wetry and understand what's up
(22:51):
with their IP, things like that,and some of these folks we talk
to have like five differentproducts.
I don't understand what's upwith their IP, things like that,
and some of these folks wetalked to have like five
different products.
And that's another thing too.
You know, it's just, thesethings take so much time.
I mean, as you know very, verywell, like it's, it's just not.
It goes back to these outlierstories, the YC stories of like
(23:16):
Code Academy and all thesethings of just like oh, I
launched it, I have like amillion users and if you don't,
if it doesn't all check that boxahead of time, don't do it.
Or, you know, if you don't seecrazy traction in the first like
10 days, you should move on tothe next one.
I think that mentality hasreally kind of plagued the
industry as a whole and, um,it's just such a long game like
you just need to stay in it.
So I would say those are anotherkind of factor of things we've
(23:39):
seen, but again kind of goingback to debt too, like
especially on the e-comm side.
Speaking of that, when we talkto e-comm companies we often see
a lot of debt obligations, alot of inventory that's been
unsold.
You know different lines ofcredit, personal guarantees,
personal credit cards beingmaxed out.
(24:01):
So we definitely see that evenmore so on the e-comm side, for
whatever reason and again, Ijust be, just be cautious,
especially with personalguarantees.
You know that's coming rightback to you and you know the
corporate shell will protect youto a degree for sure.
But yeah, just be careful withall types of debt instruments.
(24:23):
Just know what you're gettinginto ahead of time, really model
that out and make sure you canmake those payments.
And if not, you know, try andkind of put the halt on it
earlier rather than waiting tillthe very end.
Speaker 1 (24:35):
try and kind of put the halt on it earlier, rather
than waiting till the very end?
What are your thoughts aroundlike venture debt?
Because I've had a few founderswho I know, who you know they
might not have any issues withtheir business, but then they
trigger a covenant and you knowthe venture debt is going to
come in and like take theirbusiness and sell it off for
parts or just like blow it up.
Is that something that you'veseen come through your door as
(24:59):
well?
Speaker 2 (25:00):
Yeah, we have.
Yeah, we have.
Yeah, it's just another thingto be super cautious about and
really understand what yourcovenants are.
You know, we've seen a bunch offolks where it's like you might
have a decent chunk of capitalleft back in your bank but that
bank is held, you know, based oncovenant, that bank is held
with, um, you know, whateverfacility you you took it out
(25:22):
from and you know you read, likeyou said you reach that, you
reach that number.
Uh, they're going to take allthat money and now you're going
to be a cash out zero that youmight not even expect, like
we've seen that.
We've heard of that.
And um, yeah, again, just, uh,the just be careful with that
stuff.
It's, um, it can be prettynasty.
Speaker 1 (25:43):
I uh, going back to your comment about the pivoting,
um, I mean, even for this newbusiness it's taken so much time
and effort and investment toget it to this point.
I can't even imagine if we werelike pivoted right now or if we
, you know, had like multipleproduct lines or something.
And I think sometimes with apivot you might even be better
off, just like starting a newcompany, because let's say, you
(26:07):
pivot but you only have, youknow, six months of burn left.
But if you was a new businessand you had 18 months, then
you'd actually be able to seethat through and it would have
that product market fit and youcould start to grow it.
But, like, six months is anuntenable timetable to try, and
you know, go for something whenit may or may not be better for
you to just, you know, walk away.
Speaker 2 (26:29):
Yeah, I totally agree .
I think, yeah, just like thepivot's been really romanticized
and I think people have verydifferent definitions of it.
I think there's and again, youhear the story of Slack.
Right, they were working onsomething totally different,
it's like a video game and theymade Slack, but it's just so
rare.
These things are so rare.
It's, I totally agree.
(26:51):
And you know, what they alsodon't account for too is
normally.
Normally, when you pivot, you'reyou.
You you're feeling the pressureat that point right, like you
knew, you know that the firstthing didn't work out.
You're, you've already burned Xamount of capital, like you're
saying, you don't have that muchleft.
Your investors are like whatthe fuck are you doing?
Um, it's.
You know that pressure canforce you to make bad decisions
(27:15):
and be even less patient,ironically, with that next one,
for it to magically work out.
So, yeah, I totally agree.
I think a lot of folks could bebetter off just kind of winding
things down, taking a beat andkind of seeing what they can
test out and figure out for thatnext one.
But yeah, yeah, yeah.
Speaker 1 (27:37):
Well, I got one last question for you before we wrap
things up here.
Um, if you are a business ownerand you have to, you know, go
through the dissolution process,uh, for, for better or worse,
whether it's an asset sale, um,or if you need to, you know,
just just walk away like how,how did they go about, you know,
getting started with you?
(27:57):
What does that process looklike?
How does that whole thing panout?
Speaker 2 (28:03):
Yeah, totally.
So you know, I'll say too, feelfree to talk to us, no matter
what.
We know a bunch of differentpeople in this industry lawyers,
bankruptcy attorneys, firmsthat do alternative, you know
alternatives to bankruptcy.
We're not a great fit foreveryone, right, but founder,
founder, we're always just hereto help folks at this time.
(28:23):
So, yeah, feel free to reachout just to get intros or
referrals to other places.
But, that being said, yeah, youknow we, we really try and
handle, like I said, that end toend dissolution process, just
kind of all the legal work, taxwork.
You'll have a project manageron your team as well.
Just, you know, really ourwhole goal is to help you move
on to what's next and not haveto worry about this.
So, yeah, feel free to, youknow, email me directly, brendan
(28:47):
at sunsethqcom, or feel free togo to our site sunsethqcom book
some time.
You know someone from our teamwill be happy to chat with you
and, you know, send you on yourway or kind of find some other
solution if we're not a greatfit.
Speaker 1 (29:02):
I lied.
I have one last question.
Do you have any thoughts around?
You know areas or opportunitiesof expansion for you.
You know, outside of just youknow, dissolution, whether it be
asset sales.
You know, if this company comesto you, maybe you can sell off
(29:22):
parts.
I'm sure there's a lot ofdifferent things that have come
up that you'd be like oh youknow, maybe we could do that,
but maybe we shouldn't, but wecould, and then maybe we make
more money and then you mighthave your own.
You know multiple product lines.
Speaker 2 (29:41):
Yeah, no, I think you're, you're totally right.
I mean we've, we're, we're veryexcited about the adjacent
opportunities and just, you know, trying to help founders even
like we're, like you know,earlier in the process and kind
of get them the outcome thatthey actually want.
Right, they don't want todissolve, so can we help them,
um, find ways to not get to thatpoint.
So, yeah, we're super excitedabout doing that.
But, yeah, right now, goingback to you know, pivoting and
(30:02):
focus it's super hard.
But, this, being my third goaround, I think that is one
thing I've gotten better at isjust not being as tempted to try
and do everything and just stayreally focused on what's
working.
So, yeah, that's what we'redoing now, but we definitely
know a lot of buyers, a lot ofbankers.
So, again, if you're interestedin selling, happy to chat and
(30:24):
again kind of refer you out,things like that.
Speaker 1 (30:28):
Awesome.
Well, I appreciate you comingon.
Thanks again for taking thetime.
We'll put your info in the shownotes as well, so if people
need to reach out, they can.
But thanks again for taking thetime.
We'll put your info in the shownotes as well, so if people
need to reach out, they can.
But thanks again for everybodylistening, as always.
This is Brandon Amoroso.
You can find me atBrandonAmorosocom or Scalistai.
Thanks for listening and seeyou next time.
I'm Brandon Amoroso, and this is the D2Z Podcast
building and growing yourbusiness from a Gen Z
perspective.
Hey everyone, thanks for tuningin to D2Z, a podcast about
using the Gen Z mindset to growyour business.
I'm Gen Z entrepreneur BrandonAmoroso, founder and president
of retention as a service agencyElectric, as well as the
(00:24):
co-founder of Scaless, and todayI'm talking with Brendan
Mahoney, who's the founder andCEO of Sunset, which is a
company that helps companiesshut down.
Thanks for coming on the show.
Speaker 2 (00:35):
Thanks so much for having me man Appreciate it.
Speaker 1 (00:38):
So before we dive into the interesting topics
behind why and how you can shutdown a business, can you give
everybody just a briefbackground on yourself and sort
of how you ended up here?
Speaker 2 (00:51):
Yeah, of course.
Yeah, definitely an interestingjourney to run this company.
But yeah, I went through YCombinator a few years ago, back
in 2018.
So kind of started like a toolfor digital agencies out of
there, ended up selling that toprivate equity.
Kind of immediately startedanother company after.
That should have taken a minutebut, yeah, ended up not working
(01:14):
out, couldn't really findproduct market fit.
So went through the dissolutionprocess.
Knew nothing about it, was verysad and painful and long and
expensive and so, yeah, I meanthat's kind of how we got to
where we are today.
So, yeah, I run a company likeyou mentioned, called Sunset.
We help primarily, you know,tech companies wind down,
(01:36):
handling, you know, all thelegal, tax and operational
aspects that go into adissolution.
Speaker 1 (01:43):
Are there any components to what you do that
are required when a business isgetting acquired versus, you
know, actually like shuttingdown because they're closing the
doors?
Speaker 2 (01:58):
Yeah, it's a really good question.
So you know, especially if youhaven't gone through an
acquisition before, there's alot of different flavors of them
, so a lot of them might be anasset sale actually.
So you know, let's say thebuyer is looking to acquire your
startup.
You know they could do a fullstock sale.
(02:19):
So they're actually literallypurchasing all of the stock of
your entity and you know there'ssome benefits to that.
But you can imagine there are alot of risks, right, if you're
buying the whole entity, you'rebuying all the contingent
liabilities.
So, like anything that comes outof the woodworks, you're now
you're the rightful owner ofthat, and so what a lot of
(02:40):
buyers will do is they'll doasset sales.
So they'll literally just pluckspecific assets and or
liabilities even from yourcompany and just purchase those,
but they'll actually, in theprocess, leave behind, you know,
your corporate shell that hasall the other like we talked
about contingent liabilities,taxes, you know, state agencies,
(03:00):
registrations, all that goodstuff will still be there, and
so, and similarly withacquihires too, right, so when
you know, maybe they're justgetting some employment
agreements, things like that.
So we work with a lot ofcompanies who had great exits,
but yeah, they were in the formof an asset sale or an acquihire
and, yeah, you know, you stillbasically need to go through the
(03:23):
entire dissolution process,despite that?
Speaker 1 (03:28):
Yeah, I don't think that.
Because my exit was an assetsale, I don't think that the
full dissolution process evernecessarily took place.
I probably have the state ofWashington calling me right now
for my employer taxes.
That has not been paid in likethree years?
Um what split, would you say,is like?
Speaker 2 (03:51):
um you know, of the transactions that you see, are
most of them primarily likeasset sales well, yeah, so if
they it, so what's you know thebenefit of a stock sale, let's
say, is you know you don't needto do the dissolution.
The entity was fully engulfedin the acquirer.
So we don't work with, we'rejust not in those transactions.
(04:14):
But I would say probably about30% to 40% of the companies we
work with have some type ofasset purchase agreement that
was executed when they'reworking with us.
So it's a decent chunk havegone through kind of an asset
sale of some kind or acqui-hire.
Speaker 1 (04:32):
I think it's relatively obvious, if you're
selling your business in anasset sale why you would want to
use a business like yours todissolve the entity.
But let's say you're somebodywho you know, everything's just
gone to shit and you know you'rejust like.
Now I still have to deal withit.
And what are some of the like,the repercussions if you don't
(04:55):
handle things appropriately whenit comes to resolving the
business.
Speaker 2 (04:59):
Yeah, we definitely get this question a lot.
So I'll kind of caveat and sayyou know, most of the companies
we work with are venture backedor have some type of you know,
third party investors that putcapital into the business.
And so, using that as anexample to start with, you know,
it's actually pretty, it's notvery cool to just like go zombie
(05:22):
mode, because what a lot offounders don't understand is, as
a venture fund, any of thesetypes of firms, any investors,
they get audited and when theyget audited they need proof that
your company actually shut down.
So, yeah, you might think, hey,I sent an email, whatever we're
shut down, but they actuallyneed that certificate of
dissolution to go to the IRS andsay, hey, yeah, this company
(05:44):
properly dissolved.
So you know, one aspect is that.
So, like this is definitely abig reputational game, you know,
especially in the startup world.
And so it's not investors.
We talked to a lot of investorsand they get really not happy
when folks literally just walkaway.
So that's one be when folksliterally just walk away, so
(06:09):
that's one.
But two, you know you'reeffectively building up a case
against yourself with all thesestate agencies, the IRS, so you
can do that and like are theygoing to go?
You know caveat nothing on thispodcast is legal and tax advice
Are they going to go after you?
You know, probably not, havethey?
Yeah, they've definitely goneafter people for sure, for you
(06:30):
know being extraordinarilydelinquent on their taxes.
Speaker 1 (06:34):
So yeah, got it.
No, that that makes sense.
What are?
You know, what are some of thethings that you took away from?
You know, your previousbusinesses that made you even
want to, you know, embark uponthis as the venture.
Speaker 2 (06:56):
Yeah.
So I mean, you know, goingdeeper in the story, so after my
, you know, after my secondcompany didn't work out and we
dissolved it, it took like twoyears where I was working for
other folks.
I didn't know what I wanted todo.
I didn't know what I wanted tostart and during that time I
started getting texts from likedifferent YC buddies, other
(07:16):
founders, I know, just beinglike hey man, shit is not going
well, like this is bad.
I know you went through thisdissolution, like can you help
me out?
So after like the third orfourth text I was like this is
insane, like it's so easy tostart something.
You know you're going likeStripe Atlas pay like 500 bucks,
takes like five minutes, reallynot the same for winding things
down.
So you know that was kind ofthe journey to get here.
(07:43):
But yeah, I kind of lost threadof your initial question so I
apologize actually.
Speaker 1 (07:50):
What even prompted you to want to start the
business that shuts downbusinesses.
It really is my favoritetagline for a company.
Oh my God.
No, but I didn't think aboutthe asset sales, though, and the
acqui-hires, so it's not likeyou're just a grim reaper here,
like you are helping facilitategreat things as well, too.
Speaker 2 (08:13):
Exactly.
I know it's not all doom andgloom, but you know why I wanted
to do it.
It's when I was helping some ofthose founders you know not not
when we are actually runningthis business it felt really
good, like you know, everyonesays like start companies where
you're solving your own problem.
And this was really, you know,when I dissolved my company.
(08:34):
Personally, like this was ahuge low point in my life, just
in general.
And then I was kind of saddledwith like seven to nine months
of dealing with this shit.
I screwed stuff up in New York.
I had to pay like a few grandout of pocket like a year and a
half later.
It was a disaster.
And yeah, you know, the othercompanies I had were like they
were like dev tools and designtools and it's like sure you're
(08:57):
really helping people maybe.
But for this, you know we'veworked with some real, like you
know we've.
We've worked with some real,like you know we've.
We've heard some stories fromfounders who definitely share
some of them.
But you know, we're goingthrough some really intense
stuff and being able to takethis load off their plates and
let them kind of move on andfind another job, make some more
money start another company.
It's actually extremelyfulfilling, despite it being a
(09:22):
weird space.
Speaker 1 (09:24):
Yeah, no, that makes sense and I think that's not an
uncommon refrain that I've heardfrom other folks on the podcast
that usually the best businesscomes out of whatever your
current thing is that you'redoing your current pain point
and then being able to help andsolve that for other people.
It just seems like you know mynew business is the exact same
(09:47):
case I feel like most people'sis.
It's not like you're justsitting somewhere staring in the
sky and then all of a suddenthis light bulb moment comes to
you.
Uh, like they, they like theywill, will glorify in the movies
.
Yeah, exactly exactly what areyou seeing in the market right
now?
Because you're obviously veryclose to it, you're very
connected with a lot of VCs andinvestors.
(10:07):
It seems like things maybe area bit better right now than they
were necessarily a year, yearand a half ago.
Would you say that's accurateor inaccurate?
I was talking to somebodyearlier today and they were
talking about how it's, you know, interesting to see the
dynamics between the privatemarkets and the public markets,
(10:27):
because obviously the publicmarkets are pretty much instant.
You know you're a publiclytraded stock in terms of pricing
and whatnot, but there'sdefinitely a bit of a lag when
it comes to, you know, venture.
So what are you seeing?
Um, you know, this year and andgoing into next, do you think
things are getting better?
Are they getting worse?
Speaker 2 (10:46):
I think there's still a pretty long tail of the Zerp
era going on.
From what we've seen, there'sstill a lot of companies coming
to us who raise crazy rounds.
2020, 2021, 2022, even that areeither.
You know, it's a mix.
You know some folks come to usand, yeah, they're cash out and
(11:09):
it's a problem.
A lot of folks that come to usand they've got a bunch of money
to return but they've just beentrying taking a lot of swings
at bats and they're just kind ofthey couldn't figure it out,
they couldn't get the product,we couldn't get to product
market fit and they want toreturn that capital.
So I think, from what we'veseen, there's definitely more of
I haven't really heard of toomuch pressure from VCs,
(11:30):
necessarily from founders, but Ithink there is more of an
appetite to return capital insome of those cases and maybe
there wasn't as much back in theday.
But from what we're seeing, atleast again on kind of
venture-backed, primarily techstartup sphere, yeah, it
(11:53):
definitely hasn't slowed down.
It's been only kind ofincreasing, especially as
year-end is coming up.
But I, you know, we're justlike a microcosm of the space,
so not entirely sure.
Speaker 1 (12:06):
Yeah, well, it seems like you know there's still a
lot of lag from 2020, 2021.
That's still sort of sortingitself out, even at the amount
of capital that's going intobusinesses that don't have PMF
yet is significantly less thanyou know the way that it was
(12:28):
going in in 2019, 2020, even2021.
Speaker 2 (12:32):
Oh yeah, big time.
Yeah, definitely I mean so youknow a lot of folks will come to
us.
You know, sometimes it's it'sactually pretty good.
We're the come to us early andthey're and they're still trying
to figure out their options andthey're looking at raising
bridge rounds, going to theirexisting investors, looking to
M&A, things along those lines.
That's always, I think, great.
(12:54):
You know, you've got like ninemonths, cash out, something
along those lines.
It's really good to startthinking about those things.
Things become really difficultwhen you have no time and no
money, cause then you can't sellit.
Shutting down becomes a lotmore complex.
You can't just walk away.
If you're in solvent, you'vegot a bunch of debt obligations,
like it's a lot more expensivethan you think and it's a lot
(13:16):
more time consuming anddifficult and, yeah, you
definitely don't have time toraise capital.
So we definitely been beenseeing more folks come to us
early looking at their options.
But, yeah, a lot of fundingrounds.
We've anecdotally seen a lot ofpeople have term sheets get
pulled at the last minute.
Folks have been trying for six,nine months to raise a bridge,
(13:39):
raise that next round gettingsuper close, but just, you know,
folks pulling out at the lastminute.
So, yeah, we've definitely seena decrease in kind of, you know
, capital going into companiesthat don't have truly, truly
strong growth.
Speaker 1 (13:56):
When it comes to you know, the psychological
component of this whole thing.
You know there's obviously alot of business owners who are
listening to this.
How do you sort of detachyourself and like, how are you
able to detach yourself from thethe personal identity component
of it being, you know, likeyour business and not wanting to
(14:19):
let it fail?
Yeah, because that, I mean,even that freaks me out, even
today with the new business.
You know it, you know it's like, it's like me.
It can't fail.
Like what do you mean?
It could fail, it's impossible.
So how do you like get overthat, that hurdle and what are?
You know, what are some thingsthat you did, what are some of
(14:39):
the things that you've seen someof the founders that you're
interacting with and engagingworking with right now, like you
know, get through that.
Speaker 2 (14:47):
Yeah, it's a really good question.
I mean I wish I had a betteranswer for you.
I mean for me personally.
So what we see a lot of folksdo is like travel.
I don't know if that works well.
That's what I did.
Like I rented a van with mywife.
We like drove with the PCH, youknow.
Did it help?
I don't know, but it was great,great memories, you know, I
(15:11):
don't.
I think the answer is like it'lljust have, like you will feel
that way, right, and I think theonly way to kind of heal that
is just for me was just taking abunch of time and just taking
more swings at bat and justtrying to start a bunch more
companies and playing aroundwith different ideas and just
(15:33):
trying to learn from my hugemistakes of the previous ones
that didn't work out.
But, yeah, I mean I wish I hada better answer, but I don't.
I feel the same exact way.
I just like I can't have thisone fail and it felt awful, like
it felt absolutely terrible thefirst go around.
So, and and after going throughthat like man, does that keep
(15:54):
me up at night?
Just like really not wanting toexperience that again.
So, um, it's a good question,but I, yeah, don't have a good
answer.
Speaker 1 (16:03):
No, I mean hey, hey, listen in a van on the PCH
doesn't sound that bad.
Speaker 2 (16:08):
It's great.
Speaker 1 (16:10):
Yeah, it's sick, I think, the thing that I've been
told time and time again.
Even though it's easy to say it, it's a lot harder to actually
believe it, because if youreally do love entrepreneurship,
then there's always going to bemore businesses.
You know, you're not, and itwas even the same for selling
(16:30):
the first business.
You know, because there is thatpersonal identity attachment,
like there's always going to besomething else, there's just
going to be another one.
So it's not.
It sounds ridiculous, as we'vebeen talking about you know,
having to shut down your companybecause it failed, but there's
a lot of founders that struggleafter they've sold their company
.
Yeah, because they don't haveit anymore and they don't know
(16:51):
what to do.
And it's not, you know, youdon't have the.
There's so much that goes intothat aspect of things as well.
I think maybe we've stumbledinto our next business here with
helping post-exited andpost-shutdown founders with
figuring out how to navigatelife.
Speaker 2 (17:14):
Oh man, I know, I know it is super challenging on
both ends.
I think for me too, probablykind of going back to your
initial question, though,something that was really
helpful which I didn't do a goodjob at at the time was just
talking to more founders who'vebeen through it.
I think a big thing we'retrying to do is just kind of
remove the stigma of this, likethis is a game, you know, if you
sign up for the game, youshould be well prepared, and
(17:35):
we're all well informed thatnine out of 10 don't work out
like that is.
That is the venture math, thatis how this is played, and even
not in venture.
You look at Better BusinessBureau data of SMBs since 1980,
and yeah, it's like 75% ofcompanies are going to fail
within the first five to sevenyears.
(17:56):
So I agree, it's just.
I think what you said istotally accurate If you really
love doing this, you'll be.
You'll just be forced into kindof doing the next one and
hopefully that won't be great.
Speaker 1 (18:11):
You obviously see a lot of businesses that have
failed.
Are there any common themesthat you see or you know?
Mistakes or patterns amongstthe ones that you are having to
you know help dissolve that youwould take away, as you know, a
potential, like you know,insight, or or or learning
(18:32):
lesson, for lack of a better wayto phrase it.
Speaker 2 (18:37):
Yeah, I mean, I think I think there's definitely, you
know, we, we, we do see some ofthe hot industries you know
what I mean and, like you'resaying, kind of lagging
indicators of those.
So we see some betting coming,some crypto, things along those
lines.
So I think you know these areall obvious kind of lessons,
(18:59):
nothing that's going to be newto any listener, but yeah, it's
just kind of jumping on thatbandwagon, especially being kind
of late to it can work in manyinstances but also might not
work out.
We just do see a lot of thosekind of like clumps coming in at
any given time.
But yeah, in general, I think alot of folks we see they just
(19:23):
like raise a bunch of capital,they burn a huge, huge, huge
amount by hiring a ton of folksthat's always what it is and
they're really not making muchmoney.
And so I think our you know mybiggest lesson from that and
what we're doing here at Sunsetis just being extremely, yeah,
(19:45):
extremely aware of our balancesheet and looking at our P&L and
making sure that what we'redoing is profitable and looking
at our unit economics.
And I mean another big thing too, just on the side note, is debt
right, like just, I thinkfounders don't quite understand
that debt can follow you, evenif you raise it through the
(20:13):
business, if you've got personalguarantees on it, if that debt
is secured against any assets,anything like that.
It's kind of no joke, it justpretty.
It's.
Yeah, it just becomes very,very tricky once you're
insolvent.
So you know yeah, and all thekudos to founders that you hear
(20:33):
the stories, the outlier tales,of the folks who have the credit
card binders.
I know the Airbnb guys.
They always talk about that.
They built up all this personalcredit card debt and they have
binders of it and they keptgoing and kept going and they
finally figured it out andthat's awesome.
But you should remember thatthey're one of a billion, they
(20:54):
are so so, so rare and thatstory is cool, but it doesn't
mean you should copy it, youknow, just be aware that, yeah,
it's just, we just see a lot ofthis and it's just, it's really
tough to, it's hard to help out,it becomes a lot harder really
(21:18):
tough to.
Speaker 1 (21:18):
It's hard to help out .
It becomes a lot harder.
I mean, I think the media ingeneral there's a tendency to
for I mean rightfully so,because the story is crazy.
And then that and in some ofthe other stories that you'll
see about the founders, that isnot the norm.
You know.
That's not how most businessesbecome successful.
That's the crazy outlier, whichis awesome.
But like what if one or twothings went a different way?
(21:40):
And then you know it's notairbnb it.
Or you know, even if airbnb didstill exist in some capacity,
it could be a different company.
You know there's, there's abusiness that I'm blanking on.
The name of that basically wasyelp.
Before yelp was a thing butbecause of, like the server
technologies or something youknow, they had to shut down like
a year before Yelp got started.
(22:00):
And then Yelp became what itwas because of timing and all of
those other things and factorsthat go into it.
So you know, it's good to readthe books about Airbnb or to
read the books about some ofthese companies that have these
crazy, like rising from theashes stories, but that's not
(22:20):
necessarily the model that youshould emulate and want to uh,
you know, aspire to be stressedas one.
I can't even imagine howstressed they had to have been
at that point.
Oh my God.
Speaker 2 (22:30):
Oh my God, I know, but I think I think actually
something you know kind of.
Again, going back to yourearlier question, something that
is interesting too is wedefinitely come across a lot of
companies and they'll come to uswinding down and they pivoted a
lot.
They pivoted a lot, you know.
We've talked to some companieswhere, because you know we help
them out with their assets, wetry and understand what's up
(22:51):
with their IP, things like that,and some of these folks we talk
to have like five differentproducts.
I don't understand what's upwith their IP, things like that,
and some of these folks wetalked to have like five
different products.
And that's another thing too.
You know, it's just, thesethings take so much time.
I mean, as you know very, verywell, like it's, it's just not.
It goes back to these outlierstories, the YC stories of like
(23:16):
Code Academy and all thesethings of just like oh, I
launched it, I have like amillion users and if you don't,
if it doesn't all check that boxahead of time, don't do it.
Or, you know, if you don't seecrazy traction in the first like
10 days, you should move on tothe next one.
I think that mentality hasreally kind of plagued the
industry as a whole and, um,it's just such a long game like
you just need to stay in it.
So I would say those are anotherkind of factor of things we've
(23:39):
seen, but again kind of goingback to debt too, like
especially on the e-comm side.
Speaking of that, when we talkto e-comm companies we often see
a lot of debt obligations, alot of inventory that's been
unsold.
You know different lines ofcredit, personal guarantees,
personal credit cards beingmaxed out.
(24:01):
So we definitely see that evenmore so on the e-comm side, for
whatever reason and again, Ijust be, just be cautious,
especially with personalguarantees.
You know that's coming rightback to you and you know the
corporate shell will protect youto a degree for sure.
But yeah, just be careful withall types of debt instruments.
(24:23):
Just know what you're gettinginto ahead of time, really model
that out and make sure you canmake those payments.
And if not, you know, try andkind of put the halt on it
earlier rather than waiting tillthe very end.
Speaker 1 (24:35):
try and kind of put the halt on it earlier, rather
than waiting till the very end?
What are your thoughts aroundlike venture debt?
Because I've had a few founderswho I know, who you know they
might not have any issues withtheir business, but then they
trigger a covenant and you knowthe venture debt is going to
come in and like take theirbusiness and sell it off for
parts or just like blow it up.
Is that something that you'veseen come through your door as
(24:59):
well?
Speaker 2 (25:00):
Yeah, we have.
Yeah, we have.
Yeah, it's just another thingto be super cautious about and
really understand what yourcovenants are.
You know, we've seen a bunch offolks where it's like you might
have a decent chunk of capitalleft back in your bank but that
bank is held, you know, based oncovenant, that bank is held
with, um, you know, whateverfacility you you took it out
(25:22):
from and you know you read, likeyou said you reach that, you
reach that number.
Uh, they're going to take allthat money and now you're going
to be a cash out zero that youmight not even expect, like
we've seen that.
We've heard of that.
And um, yeah, again, just, uh,the just be careful with that
stuff.
It's, um, it can be prettynasty.
Speaker 1 (25:43):
I uh, going back to your comment about the pivoting,
um, I mean, even for this newbusiness it's taken so much time
and effort and investment toget it to this point.
I can't even imagine if we werelike pivoted right now or if we
, you know, had like multipleproduct lines or something.
And I think sometimes with apivot you might even be better
off, just like starting a newcompany, because let's say, you
(26:07):
pivot but you only have, youknow, six months of burn left.
But if you was a new businessand you had 18 months, then
you'd actually be able to seethat through and it would have
that product market fit and youcould start to grow it.
But, like, six months is anuntenable timetable to try, and
you know, go for something whenit may or may not be better for
you to just, you know, walk away.
Speaker 2 (26:29):
Yeah, I totally agree .
I think, yeah, just like thepivot's been really romanticized
and I think people have verydifferent definitions of it.
I think there's and again, youhear the story of Slack.
Right, they were working onsomething totally different,
it's like a video game and theymade Slack, but it's just so
rare.
These things are so rare.
It's, I totally agree.
(26:51):
And you know, what they alsodon't account for too is
normally.
Normally, when you pivot, you'reyou.
You you're feeling the pressureat that point right, like you
knew, you know that the firstthing didn't work out.
You're, you've already burned Xamount of capital, like you're
saying, you don't have that muchleft.
Your investors are like whatthe fuck are you doing?
Um, it's.
You know that pressure canforce you to make bad decisions
(27:15):
and be even less patient,ironically, with that next one,
for it to magically work out.
So, yeah, I totally agree.
I think a lot of folks could bebetter off just kind of winding
things down, taking a beat andkind of seeing what they can
test out and figure out for thatnext one.
But yeah, yeah, yeah.
Speaker 1 (27:37):
Well, I got one last question for you before we wrap
things up here.
Um, if you are a business ownerand you have to, you know, go
through the dissolution process,uh, for, for better or worse,
whether it's an asset sale, um,or if you need to, you know,
just just walk away like how,how did they go about, you know,
getting started with you?
(27:57):
What does that process looklike?
How does that whole thing panout?
Speaker 2 (28:03):
Yeah, totally.
So you know, I'll say too, feelfree to talk to us, no matter
what.
We know a bunch of differentpeople in this industry lawyers,
bankruptcy attorneys, firmsthat do alternative, you know
alternatives to bankruptcy.
We're not a great fit foreveryone, right, but founder,
founder, we're always just hereto help folks at this time.
(28:23):
So, yeah, feel free to reachout just to get intros or
referrals to other places.
But, that being said, yeah, youknow we, we really try and
handle, like I said, that end toend dissolution process, just
kind of all the legal work, taxwork.
You'll have a project manageron your team as well.
Just, you know, really ourwhole goal is to help you move
on to what's next and not haveto worry about this.
So, yeah, feel free to, youknow, email me directly, brendan
(28:47):
at sunsethqcom, or feel free togo to our site sunsethqcom book
some time.
You know someone from our teamwill be happy to chat with you
and, you know, send you on yourway or kind of find some other
solution if we're not a greatfit.
Speaker 1 (29:02):
I lied.
I have one last question.
Do you have any thoughts around?
You know areas or opportunitiesof expansion for you.
You know, outside of just youknow, dissolution, whether it be
asset sales.
You know, if this company comesto you, maybe you can sell off
(29:22):
parts.
I'm sure there's a lot ofdifferent things that have come
up that you'd be like oh youknow, maybe we could do that,
but maybe we shouldn't, but wecould, and then maybe we make
more money and then you mighthave your own.
You know multiple product lines.
Speaker 2 (29:41):
Yeah, no, I think you're, you're totally right.
I mean we've, we're, we're veryexcited about the adjacent
opportunities and just, you know, trying to help founders even
like we're, like you know,earlier in the process and kind
of get them the outcome thatthey actually want.
Right, they don't want todissolve, so can we help them,
um, find ways to not get to thatpoint.
So, yeah, we're super excitedabout doing that.
But, yeah, right now, goingback to you know, pivoting and
(30:02):
focus it's super hard.
But, this, being my third goaround, I think that is one
thing I've gotten better at isjust not being as tempted to try
and do everything and just stayreally focused on what's
working.
So, yeah, that's what we'redoing now, but we definitely
know a lot of buyers, a lot ofbankers.
So, again, if you're interestedin selling, happy to chat and
(30:24):
again kind of refer you out,things like that.
Speaker 1 (30:28):
Awesome.
Well, I appreciate you comingon.
Thanks again for taking thetime.
We'll put your info in the shownotes as well, so if people
need to reach out, they can.
But thanks again for taking thetime.
We'll put your info in the shownotes as well, so if people
need to reach out, they can.
But thanks again for everybodylistening, as always.
This is Brandon Amoroso.
You can find me atBrandonAmorosocom or Scalistai.
Thanks for listening and seeyou next time.
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