The Transparency Double Standard: Why Founders Need to Own Their Shutdowns
Founders need to do better!
Every shutdown story is met with a myriad of opinions, and rightly so, because we care about the ecosystem. I wrote recently about why this feedback must lead with empathy rather than default to criticism.
However, just as we celebrate founders when they raise money, the press releases, LinkedIn posts, and media interviews, it only makes sense that we're carried along when there's a high-profile shutdown. Not radio silence. These companies just... disappear.
Here's what I'm seeing too often:
Founders who were media darlings during fundraising suddenly go ghost when shutting down
Vague "we're pivoting" statements when they're actually winding down
Employees finding out through rumours, not official communication
Customers left hanging with no transition plan
Investors getting cryptic updates with no clear timeline
This has to stop.
The fear is understandable! Trust me, I get it, I'm African. The stigma around failure, personal embarrassment, not knowing how to communicate bad news. But here's the reality: How you shut down defines your reputation more than how you raise money.
Founders: Here's your shutdown playbook:
Employees first - Maximum notice and transition support
Customers second - Clear timeline, data migration plans, alternative solutions
Investors third - Honest post-mortem, capital return process, lessons learned
Media last - Simple, honest statement. Own the narrative before others do
Early-stage investors: We're part of the problem. Our job isn't just writing checks, it's shepherding founders through the entire journey, including the difficult endings.
What we should be doing:
Provide shutdown playbooks during onboarding (not when things go wrong)
Help craft communication strategies that preserve the founder's reputation
Support them emotionally through what's often their first major "failure"
Normalise transparent shutdowns in our portfolio communications
The ecosystem gets stronger when we handle endings with the same professionalism we bring to beginnings.
Your shutdown story becomes someone else's learning experience. Let's make it count.