Sell first, close second
The single most expensive mistake is dissolving the company or letting assets expire before exploring a sale. A domain that lapses is gone. A codebase nobody can deploy is worth a fraction of one that runs.
Give yourself a window. Two to three months of minimal hosting costs is usually far less than the value it preserves, and it is the difference between selling a live product and selling an archive.
The order that works
Sequence matters, because several of these steps are irreversible and some are legally required before others.
- Decide with your co-founders and board, and record the decision
- Take advice on your obligations to creditors, staff and shareholders
- Inventory every asset, including accounts nobody has logged into recently
- List the assets for sale while the product still runs
- Notify users with reasonable notice and offer data export
- Complete the sale and transfer accounts deliberately
- Settle liabilities, then dissolve the entity
Your obligations to users and staff
Users are usually entitled to notice and to export their data, and your privacy notice may constrain what you can transfer to a buyer. Handle this before agreeing a sale, not after.
Employment obligations vary by jurisdiction and are not optional. Notice periods, final pay and statutory processes should be handled with advice, particularly if the company may not be able to meet its debts.
Mistakes that destroy value
Most value destruction in a shutdown is accidental. Nobody decides to throw away a domain, they simply stop paying for it.
- Letting the domain expire before a sale completes
- Cancelling hosting so the product can no longer be demonstrated
- Deleting repositories or analytics history
- Losing access to third party accounts as team members depart
- Waiting until the team has gone before writing documentation
Common questions
Should I sell before or after shutting down?
Before, always. Assets are worth far more while the product runs and someone can still explain it.
What do I do with user data when shutting down?
Give notice, offer export, and take advice before transferring personal data to a buyer. Your privacy notice may not permit it.
How long should I keep hosting running?
Long enough to complete a sale, commonly two to three months. It is usually cheap relative to the value it protects.