Sunset

"When a founder is winding down their company, it feels like being alone in the woods at night." That's how David described it to me in his final round interview. Dark. Trees everywhere. No idea what's out there. He said Sunset is the team that finds them, lights a fire, sits them down. Tells them to rest while we go out hunting and gathering for them. I've done 100s of interviews. Never heard anything like that. Today, I'm incredibly excited to welcome David to the Sunset engineering team. During the process, David told us (rather reluctantly) that he just wanted to work hard at his next job. You never really know if that's true until someone actually shows up. But David meant it. He comes in everyday, with an incredible attitude, and works insanely hard for our customers and team. Psyched you're here 🥳

I don't usually get to dig into wind-down trends with a room full of investors. Last week I did. I joined Mike MacCombie and Side Door Ventures at Mike's inaugural pre-seed investor summit in Hudson Yards. A few things that came up: which sectors are seeing the sharpest increase in closures right now, what the companies winding down actually look like from a capital and valuation perspective, and what's happening with the 2017-2019 cohort. Companies that built real products, raised real money, and are now facing a fundraising environment that wasn't in the original plan. What I appreciate about Mike's approach is that he's building a room where the honest conversations actually happen. Wind-downs don't come up at the typical networking event. They came up here. Thanks for having Sunset in the room!

Most technical founders I talk to don't want to start another company. Not because of burnout. Because they didn't realize the job is sales. I've been interviewing a lot of engineers lately for roles at Sunset. Talented people, many of them former founders with real experience building. When I ask why they don't want to start another thing, the answer almost always ties back to: they underestimated how much of the work is selling. They don't hate it. They just don't know if they want to commit to getting genuinely good at it. But that's kind of the job. For a long time, what gatekept starting a company was the building. Finding the right technical co-founder, understanding your systems, shipping consistently. That's no longer the barrier. The technical side is accessible now, which means the gap that separates founders is on the GTM side. Getting in the room, earning trust, closing it out. When someone tells me they want to start a company someday, I tell them to go join a great startup's sales or marketing team and go deep. That kind of experience will take you a long way.

The pressure to be AI-native has never been higher, which is exactly why the contrarian bet right now might be starting something that isn't. I see the cost of that pressure every week. Founders come through our door who led with AI because the market rewarded it. They shaped the story around it, raised on it, and then couldn't make the underlying business work once the narrative stopped carrying them. Chasing what's fundable and building what's needed are two different games. The former is loud right now. The latter tends to matter more. That said, I'm not the one making the contrarian bet... I'm going with the herd on AI but I'll be watching to see who doesn't. I wonder if some of the most interesting companies of this era are going to come from the people building the unfashionable (potentially non-AI) thing.

Every time you raise, you're closing off outcomes. And I'm watching a lot of founders raise like that math doesn't apply to them. The mental model I use is simple: if I take this round, what exits can I no longer say yes to? A $70M cap might feel like validation today, but it's a gate you now have to clear tomorrow. A $50M acquisition offer? You can't take it. Not really. Nobody on the cap table is happy. Raise at a $10M valuation and that same offer is life-changing for you and a fine return for your investors. Same company, same offer, completely different math. I run a company that helps startups wind down, so I see how this ends. The founders often in a tough spot usually aren't the ones who raised too little. They're the ones who raised at a valuation they could never grow into, and lost the ability to take any of the okay outcomes along the way. Right now caps are higher than I've ever seen them. Part of it is that everyone's racing to be the next Cursor or Lovable, raising like they're already there. For almost everyone, it won't play out that way. And the high cap will be the thing that closes the door on the outcomes that would have worked. Every round you take is an exit you can't.

Secondaries used to be completely taboo. VCs would block them and question the founder's commitment if it was even being considered. That thinking has completely flipped. A founder who's been paying themselves below market for five years with everything tied up in equity is not in the same headspace as a founder who has some financial breathing room. When an acquisition offer comes in, the cash-poor founder has a very hard time saying no — even if that outcome doesn't work for their investors. The founder's math and the VC's math are completely misaligned. Give that same founder $1M+ from a secondary and the calculus changes. They can turn down a smaller exit and swing for a much bigger outcome because they're not making that decision from a place of desperation. Founder and investor interests realign. That's the insight that changed the game - pure incentive alignment. The broader reality is that startups are staying private longer than ever — the average path to liquidity now stretches a decade or more. Asking founders to spend ten years equity-rich and cash-poor, paying themselves below market, and then expecting clear-headed long-term decisions is asking a lot. Secondaries are becoming the answer to that, and increasingly, doing one isn't a sign of cashing out early but one of the most strategically sound moves a founder can make.

When founders come to us in panic mode, they usually feel like they're out of options. There are almost always more options than they think. Here's how I'd advise to think about the decision tree: 𝟭. 𝗕𝗿𝗶𝗱𝗴𝗲 𝗿𝗼𝘂𝗻𝗱 Always prefer going to your existing investors first — they know the business, they've already bet on you, and that confirmation bias works in your favor. Pitch them hard, but put a hard timebox on it. If you don't, you'll find yourself six weeks in still chasing a maybe while every other option is quietly running out of time. 𝟮. 𝗙𝗼𝗰𝘂𝘀 𝗲𝗻𝘁𝗶𝗿𝗲𝗹𝘆 𝗼𝗻 𝗴𝗿𝗼𝘄𝘁𝗵 Before or alongside the bridge conversation, ask yourself if you can get the needle moving enough to either generate breathing room or make the bridge case stronger. But be honest about the timeline. If you burn too long here with no movement, you're likely to close off every other option. And lastly, the new growth metrics needed to raise are very different from what they were even 2 years ago. 𝟯. 𝗠&𝗔 — 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰𝘀 𝗮𝗻𝗱 𝗮𝗰𝗾𝘂𝗶𝗵𝗶𝗿𝗲𝘀 Who already knows you? Who would benefit from what you've built? Start those conversations now, not when you're desperate. Everything takes 5x longer than you think — M&A, strategics, acquihires, all of it. If you wait until you have two months of runway, it's already too late. An acquihire won't necessarily be a great outcome for your cap table or for you personally. But "we got acquired" carries more weight than founders realize. 𝟰. 𝗔𝘀𝘀𝗲𝘁 𝘀𝗮𝗹𝗲 If a full acquisition isn't on the table, it's worth asking whether parts of the business have standalone value (IP, technology, data, customer contracts). An asset sale won't return the fund but it can return something meaningful to investors and give you a cleaner ending than a straight shutdown. 𝟱. 𝗞𝗻𝗼𝘄 𝘄𝗵𝗲𝗻 𝘁𝗼 𝗺𝗼𝘃𝗲 𝗼𝗻 𝗳𝗿𝗼𝗺 𝗲𝗮𝗰𝗵 𝗽𝗮𝘁𝗵 If your insiders say no to the bridge, it's worth considering whether going out to new investors is the best use of your time. If growth isn't moving in the timeframe you set, the same applies. The decision tree only works if you're honest with yourself about what you're seeing. The hardest part is that by the time founders get here, they're usually burnt out. Running on empty and trying to make clear-headed strategic decisions at the same time is brutal. But mapping this out early and staying honest gives you the best shot at keeping options open.

I think Webflow is dead. And I say that as one of their biggest fans... Webflow is how I got started. It taught me to code, and using it for the first time felt like a superpower — I could build real things on the internet without waiting on anyone. But I just rebuilt the entire Sunset website in Cursor over a couple of weekends. Full CMS, dozens of pages, interactive imagery, Midjourney assets throughout. It would have taken me legit 50x as long in Webflow, and the output is better. I feel like they needed to pull an Intercom. Literally throw out the entire legacy product that made $100s of millions and lean into a new, agentic and AI filled era. Because Webflow's whole moat is a visual builder. But when the fastest path from idea to live site is describing it in English, what exactly is the visual builder for? And that's just the build side. One of the bigger shift is on the input side. We pulled a year of customer calls, sales conversations, and testimonials into Claude. What kept surfacing was how much the human element of a shutdown matters to founders going through one. We knew that but seeing it in the source material made it obvious what to double down on — in the copy, in the structure, in what we chose to feature on the site. The old path was: manually synthesize feedback (or just make it up) → write a brief → hand it to a designer → watch them interpret it through their own lens → hand that to a dev → QA → repeat. Every step lost signal. Now you go from raw transcripts to live site, grounded in what customers actually said. Truly saddened to say but for the first time in ~10 years, I no longer pay for any Webflow subscription. Curious what you think — www.sunsethq.com