Updated October 2026
For VCs: data sales in portfolio wind-downs
Winding down a portfolio company used to mean recovering whatever cash was left and closing the books. Code and data now add a line to the recovery. MIT Technology Review reports that 47% of SimpleClosure's deals include code or data, and that proceeds from a dead startup's data typically go to senior creditors and investors.1,2
The pipeline
More shutdowns, more assets to recover
Carta and AngelList estimates, as reported by MIT Technology Review, show annual startup shutdowns rising 26% to 56% in recent years. In our reading, a fund with a large early-stage book should expect more of its portfolio to end in a wind-down than in an exit, and should plan the recovery accordingly.3
The wind-down channels are scaling to match. SimpleClosure's stated goal is to hand more than $10M back to startups before 2026 is out. Its typical data deal is modest, at $10K-$100K, but across a portfolio with several closures a year the amounts can add up.4,5
| Fact | Value and source |
|---|---|
| Share of wind-down deals with data | 47% of SimpleClosure's deals now include code or data |
| Startup shutdowns | Carta and AngelList estimates show annual startup shutdowns rising 26% to 56% in recent years |
| Expected returns | Expects to return over $10M to startups by the end of 2026 |
| Carta and SimpleClosure | Carta retired its own shutdown product, Carta Conclusions, by December 2024 and invested in SimpleClosure's $15M Series A |
Infrastructure
How wind-down tools now connect to the cap table
Carta retired its own shutdown product, Carta Conclusions, by December 2024, and invested in SimpleClosure's $15M Series A. SimpleClosure says it calculates distributions according to each company's waterfall and integrates with cap table platforms such as Carta.6,7
For a fund, the practical effect is that a data sale can be modeled inside the same distribution as everything else in the wind-down, rather than handled as an afterthought once the cash has been paid out. That is our reading of how the pieces fit, not SimpleClosure's claim.
Proceeds
Who ends up with the money
MIT Technology Review's reporting is that the money from a dead startup's data tends to reach senior creditors and investors, and not the employees whose messages and code make up the archive. Whether that holds for a particular company depends on its documents and its creditors. That is a question for the board's counsel and the licensing company, not one we answer.2
The employee point is worth raising at the board anyway. Our reading is that founders and staff are more willing to help map an archive when they understand early how the sale works and who receives what.
Fund practice
What to ask at the portfolio company's board
Ask early whether the company's code, Slack, email and documents have been inventoried; whether any channel has sampled them; and which channels have been approached. Ask that subscriptions stay live until a sample review is done. Size the effort to the likely return: SimpleClosure's 150+ deals give a typical band, and most companies will land inside it.5
Ask, too, who will hold the admin logins once the last employees leave, and whether that person knows the archive is meant to be offered before it is deleted. aitrainer.work notes that Slack, Google Workspace and GitHub organizations get deleted after non-payment. A wind-down that loses its workspace to a missed invoice has lost the asset, whatever the waterfall says.8
FAQ
Questions, answered with sources
MIT Technology Review reports that 47% of SimpleClosure's deals now include code or data.1
Carta and AngelList estimates, reported by MIT Technology Review, show annual shutdowns rising 26% to 56% in recent years.3
More than $10M, which SimpleClosure says it expects to have returned to startups before the close of 2026.4
Across SimpleClosure's 150+ wind-down data deals, the typical price has been $10K-$100K.5
Typically not, MIT Technology Review reports: proceeds usually go to senior creditors and investors.2
We do not answer legal questions. Ask the licensing company: their team reviews this with you before anything is signed.
Before you sign
Legal questions go to the licensing company
We do not answer legal questions. Ask the licensing company before you sign: their team reviews these with you.
Questions for this kind of business
- Does the investor rights agreement or any side letter give the fund a say over a data license during the wind-down?
- How do liquidation preferences apply to proceeds from a data license?
- Should the fund's own counsel review the license before the portfolio company signs it?
- What are the trustee's, assignee's, receiver's or board's duties, and who receives the proceeds?
Questions for any buyer
- Is the license exclusive, and for how long?
- Can you sublicense the data, and to whom?
- Which AI labs will receive it, and will you tell us?
- How long do you keep it, and how is it deleted?
- What is your liability cap, and who indemnifies whom?
- Will the contract ban re-identification of people in the data?
- Who removes personal data, by what method, and do we approve it first?