For advisors
Options for founders shutting down a startup
You are choosing among three paths on a short calendar: shut the company, keep looking for a buyer, or ask whether the operational records can be licensed. You may talk to cofounders, list the tools, and send the enquiry. The company is the party on any agreement. Judge the fit on the company's headcount and records, not on a title on a pitch deck.
Up to $150K · $0 cost · 3 days
| Fact | Detail |
|---|---|
| Signature | The company signs with the data partner. You do not sign in a personal capacity, and you do not write a personal check to Vetrix. |
| Stopping | You can stop at every stage, from before the enquiry through a decision after the agreement is in front of you. |
| Cost | The cost to the company is zero dollars, so a founder is not funding a Vetrix invoice from a personal account. |
| Exclusivity | The license is exclusive. The same records go to one data buyer, not to two buyers so you can see who pays more. |
| If you are not closing | These points are for founders who are shutting the company down. A company that will keep operating is a different decision. |
What founders are deciding
You are choosing a path on a short calendar. Shut the company, keep looking for a buyer, or ask whether the operational records can be licensed. You may be the person who talks to cofounders, lists the tools, and sends the enquiry. Do that while the tools are still on. A license is not the dissolution, the layoff conversations, or the tax return. If you are not actually shutting down, this set of decisions is the wrong one.
You can stop at every stage. Read how company data licensing works for the five points where you can.
Your role as a founder, and who signs
Your role is to enquire and to decide. Sign only when you sign as an officer of the company. The cost to the company is nothing, so there is nothing for you to front from a personal account. You can stop at every stage. Tell cofounders the license is exclusive before anyone hints at a second data buyer. Your lawyer reads the agreement before an officer signs it. Eligibility is the company's headcount, records, and rights.
The company signs an NDA and the licensing agreement directly with the data partner, not with Vetrix. We tell the company the data partner's name before anyone signs.
What to tell a client
Do I sign this myself?
Only as an officer, and only in the company's name. Your own name is not the party on the agreement.
Do we pay to find out?
The company pays nothing for the fit decision. You can stop when you hear it, before any agreement.
Can we see who pays more?
The license is exclusive. Once the company signs, the same records are not offered to a second data buyer.
For a script outline you can adapt, read how to tell employees the company is closing.
Checklist
| Check |
|---|
| Sign for the company, as an officer, when there is an agreement to sign. |
| Keep the tools on until a read-only check can finish. |
| Have your lawyer review the agreement before an officer signs. |
| Tell cofounders the license is exclusive before anyone talks to a second data buyer. |
| Judge eligibility on the company's headcount, records, and rights. |
When a different role fits
If the company will keep operating, you are in a different decision. Closing is not required for a license, and shutting tools down to manufacture a close is a bad idea. Use the still-operating path, and have current management ask.
For the company's side of this, read what to do with company data when closing a business.
If that is your job instead, read options for a business that didn't sell.
If you are the finance lead keeping the ledger, read a CFO guide to winding down a company.
For the wider job, read how to wind down a company. Other roles are under company data licensing for advisors.
Read how company data licensing works for the steps. For the four license terms, read the company data license agreement, in plain English.
Related
- For advisors
Company data licensing for founders, finance leaders, investors, and advisors.
- Winding down
Order of operations to wind down a company, from approval through taxes and dissolution.
- Business brokers
What a broker tells a seller after a listing does not sell. No referral fee.
- Closing
What to do with company data while the company is closing, before tools are canceled.
- How it works
The six steps from a short enquiry to payment, and how to stop.
- License terms
The four license terms: what you give, keep, agree, and sign.
Questions about data licensing for founders
Does the founder sign the data license personally?
No. If you are an officer, you may sign for the company. If you are not, an officer does. Filling in the enquiry is not the signature, and a personal check is the wrong instrument because the company pays nothing to Vetrix. Your lawyer should read the agreement before that officer signs. You can stop after the fit decision, before any signature is required.
Do I have to pay Vetrix to find out if we fit?
No. The cost to the company is zero. The fit decision is a yes or no within three days, and you can stop after it. Nothing is uploaded with the enquiry. There is no invoice to pay from a personal account and no invoice to accrue at the company. If no agreement is signed, nobody pays anything. The data partner pays Vetrix's fee only if an agreement is signed.
Can I talk to two data buyers and pick the higher offer?
No. The company agrees not to license the same records to anyone else. Exclusivity is a term of the license, and your cofounders should hear it before anyone signs. You can still decline before signature. After signature, the agreement's terms apply, including whatever it says about a second buyer. Ask your lawyer to read that term before an officer signs.
What if we are not actually shutting down?
Then you are making a different decision. A company that will keep operating can ask about a license without a close. Have current management send the enquiry. Canceling tools in order to manufacture a shutdown is a bad idea when you are not actually closing. Closing is not a condition of asking, and the company keeps using its systems.
Sources
- Vetrix Labs. Vetrix Data Licensing.