[andrewstuart]

When shutting down, founders need somehow magically to know how to do it "right" or as best possible, when they have no experience of that.

I think investors should consider requiring founders prove they know how to shut down properly before giving money to grow in the first place.

Here are the basics:

-- what the ethical issues, how to "do the right thing"

-- how to shut down when they can still do so without debt being incurred.

-- what to say to which staff members and investors and when to say it

-- what the legal obligations are

-- how to either get acquihired, or how to find jobs for existing exployees

-- what legal bombs to avoid and how

-- what the biggest legals traps are in shutting down, such as leases which will remain fully payable

[sontek]

A lot of founders are first time founders. They barely know how to run a company let alone shut one down. I think it is fine for investors to invest in great inexperienced people.

Maybe it would make sense for the investors to mentor them during the shutdown to make sure it is done correctly, since investors have been through it many more times.