Turning Company Shutdowns into Opportunity with Simple Closure

0:00Greetings everyone. I'm excited to welcome Dori Yona, co-founder and CEO at Simple Closure. Dori, welcome to the show. Thanks for having me, Ben. Hey, great. Yeah, great to have you here. Let's kick this off. Tell us a little bit about your background. Wow. Great question. My background, I look at the founder, I'm an entrepreneur, I'm a serial entrepreneur, bottom line. I did a founder of Simple Closure, my third company. Prior to this, I was the founder of my first company was a dating app. Social networking dating pre-Tinder times. So I've been ahead of the curve. And then the majority of the last decade, I spent building a company, consumer fintech called Ernie.

0:35We scaled it to three and a half million users and eventually sold the business and then started Simple Closure back in 2023. Okay. So obviously a serial launcher. So third go at it. Yeah. Let's talk about Simple Closure. So yeah, tell us what product center services Simple Closure offers. Yeah. Great question. Question for you, maybe it'll help set the ground. If you had to guess how many businesses shut down every year in the U.S. I don't know if you know this in advance, but I assume you don't. I don't, but let me guess because I was checking out your site, so it makes sense, this question.

1:12Boy, let's just say, I don't know, 20 ,000. Okay. Off by quite a bit. The number is actually about three and a half million companies shut down every year in the U.S. Oh, wow. Yeah. Yeah. Yes. So it's actually a really big market. it. And interesting enough, you actually have an equal amount of companies that are opening every year as ones that shut down. So if you look at that U.S. economy and a lot of businesses that exist in the economy, it's pretty much flat at around 30 something million businesses for the last 20, 30 years. It goes up a few basis points year over year, it goes down a few basis points depending on the economy.

1:48But at a high level, you have this recycling motion, renewal motion of the economy and you have equal a lot of companies opening and ones that shut down. The problem is if you talk to anyone that's gone through a shutdown of a company, they will tell you it is the worst part about building a business is actually shutting it down. And what we do at Civil Closure is we help companies shut down. We like to think ourselves as the shutdown standard and automate the legal bureaucratic compliant side of shutting down a business. We take the process typically from a few months down to a few days or a few weeks and we built the software and platform to streamline and automate that process.

2:21And so we do that as our core business. We've also expanded to help companies monetize their assets when they go to shut down the company. So a lot of times companies have assets. When they go to shut down, that could be the form of IP, domain, physical assets. And so we'll also help them sell and monetize those assets. So yeah, that's what we do. We've been around now for around three years. We've helped probably close to 10 ,000 companies or so in that time span. Big Roman, yeah. Okay. Okay. And obviously ICP makes, so yeah, companies that are shutting down. Is there a certain employee size or revenue size where versus if I'm just a, say a four person company, maybe it's pretty easy to shut down, but do you see a sweet spot as far as companies that need help here?

3:05Yeah. So great question. Although what we learn is that everyone needs help. We have different products and different offerings across the spectrum. So your example of a small four person company is actually not that small. If you have four employees. There's complexity, you have payroll accounts, you have bank accounts, you have documentation they need to file the different states. I would say that the simplest or example of a company is I have a one man consulting firm that doesn't actually have employees and I'm not even on payroll. So I would say that's like the lowest end of the spectrum.

3:36And even more interesting examples, like we sometimes have companies that come to us and like, I formed last week by mistake. Opinionally closed it down and literally just did it by mistake. And so I would say that's on the very, very simple end. And then on the complex end, companies that have gone on, raised capital from external investors and have been around for many years. And we serve from the lowest end all the way to the highest end. Our focus originally has been like on the venture startup ecosystem. That's what kind of our bread and butter where we started. But today we have customers from across the spectrum.

4:09And yeah, it's interesting. And do you think, say, in the venture world, a lot of companies go bust, but does it give maybe investors or maybe those founders a little peace of mind that there are no hanging threads out there that it's officially done? No one's going to email you or call you five years later and say, hey, you forgot to remit some form for five years and now SEO has all these penalties. Yeah, great question. I think one of the things that when we, before we started the company, we did a lot of exploration in customer interviews around founders and entrepreneurs that have been through the shutdown process.

4:40And I think the thing that was so interesting and unique and consistent across every founder and company we spoke to was in every case, they had got fines or penalties months or years after shutting down because they didn't shut down properly. And a lot of them had used their lawyer or accountant to shut down. So they were like not even doing it themselves. And so I think what's really unique about what we built about X Simple Closure is we really refined the process. We built a very robust platform and tech stack, and we've just seen so many, this point, thousands and thousands of shutdowns that ultimately what you get from working with a company like Simple Closure is peace of mind to know that everything is shut down properly and you can move on knowing that everything's taken care of.

5:21So yeah, so it's definitely a really big pain point for people that sometimes use traditional service providers or try to do it themselves that they'll just get fines and penalties months and years later. Okay. Yeah. It makes a lot of sense. And before we move on, tell us a little bit about monetizing assets. So is this both physical and intangible patents or code? Or tell us a little bit more about that. Yeah, great question. So something that always been part of the vision of Simple Closure three years ago, if you would have met me and asked me, what's the vision of Simple Closure? I would have told you that our goal is to be the number one platform for shutdowns and help millions of businesses shut down.

5:56But I also said that one of the things that we realize or recognize is when you look at these millions of companies that shut down and you ask them, hey, you've built this product, you've built this service, you have this inventory. What did you do with that when you shut down and we did these customer interviews? In 97 % of the cases, give or take, the answer would be we did nothing with them. We were just in a rush to move on. We just wanted to close the company and move on and we literally did nothing and it went to waste and it evaporated into ether. And so our hypothesis is if you look at millions of companies that shut down every year, they generated trillions of dollars of intrinsic value in the form of assets.

6:36And so it's something that's been part of our vision from day one. And we've been working on it for the last year and a half or so. And a few months ago, we actually launched something called Asset Hub. So Asset Hub gives the opportunity of anyone on our platform to monetize those assets. And we actually started with two products first. The first one is Toadbase. And the second one is Workspace Data. And so what does that mean? Codebase is literally the code, your GitHub repository, the code in which you build the product. That's the first product. And the other one that's currently in Bigger is Workspace.

7:08And so Workspace, think about the Slacks, the emails, the JIRA, the Notion, the Figma's, that the company, this is again relevant mainly for tech, that you've operated and the data you accumulated over the years, that actually has tremendous value in the world of AI. Because if you think about AI, the future of AI, the two things that drive the AI are compute and data. AI companies find a lot of value in this data. And so, yeah, we actually launched Acid Hub with those two products. We are piloting other products beyond, not just for tech companies. So things like physical assets, things like domains and other things.

7:43So there's a lot of things that are on a roadmap for Acid Hub, but those are the two we started with. I love it. A lot of cross-sell, up-sell opportunity. We'll talk go-to-market pricing in a second. So it sounds like you said founded about three years ago? Yep. okay about three years ago and tell us in that journey it sounds like you've raised some capital so how much capital have you raised to date yeah we've done three rounds of funding today exceed in series a we've raised a bit north of 20 million total to date okay up to series a so about 20 20 million and tell us say with that latest series a round when did that happen approximately about a year ago you could take yeah okay about a year ago and tell us what was the genesis for that?

8:22What kind of, were you seeing traction? Like, why do you say, hey, we need some more capital here? Yeah. Well, the honest truth is we've been really fortunate that through all our funding rounds to date, we've been preempted for all three rounds. And I've been busy. And even then I was busy with the team heads down, like executing and continuing to build a business. I think that there was a lot of traction for the company and a lot of momentum. And we ended up getting preempted for our series A. And I think that the firm that preempted us, We built a really strong relationship and partnership.

8:53I felt like we had a good chemistry with that firm and with the partner there. And the terms made sense. And I think we were looking to push the gas and accelerate even faster. And we ended up doing the Series A. So again, we were in a position of being fortunate. We had the majority of our seed capital still in the bank. But I think the terms made sense. I think the partnership made sense. And we ended up really forward with it. Okay. And you're, this is a multi-company creator, went three seed to Series A with Simple Closure. So tell us, so the founders who may be thinking about raising, what lessons learned come to mind in previous experiences or these most recent capital raises that you say, I wish I knew that prior to the raise?

9:30Yeah, great question. I think that fundraising in general is a very momentum-driven, FOMO-driven process. process and so i think that if you want to go out and raise around you need to think about how do you strategically position the raise and the story the process to create that sense of urgency and fomo ultimately if there is no fomo then any investor would say you know what come back to in a few months we need a bit more traction we see a bit more numbers and things like that and so i think you really need to be methodical and thoughtful about and every company is different about how you grade and where you are on the life cycle and things like that but i think you need to be able to generate or put a plan of how to generate that together.

10:10And I think that it sounds cliche and maybe obvious, but build a real business that works and that grows and that revenue comes in and the business that can stand alone and it can accelerate with venture, but it doesn't need venture to survive, if that makes sense. Because I think that a lot of times there's a perception I remember as an early estate founder, you think that the goal is to fundraise. and when you think the goal is to fundraise it puts you in a position of be dependent because you think one you think that's the goal to actually fundraise and then you start to become dependent on that you think that's the metric of success but i think if you're a founder and you build a legit business sustainable was it a real business that works and you realize that fundraising is the tool to accelerate it not the dependency to grow the business then you come from a position of power.

11:03I think it just makes the fundraising journey easier, quicker, simpler, and you'll end up having building a good business. Yeah, that makes sense. Appreciate that insight. Now, I'm really curious on GoToMarkerMotion because it just seems like, hey, in case you shut down, we're around. But yeah, tell us, how are you prospecting? Yeah, great question. So if you think about it, our business from the surface seems like it's a transactional business. We have a one-time relationship with the customer. They use our platform, they shut down, literally lose them. So we're not like your traditional SaaS business, but I think what we've learned and built out is a very heavy partner-driven motion.

11:42So today, I think 70-plus percent of our revenue comes from partner fits. What does that mean? It means we're out there spending our go-to-market resources and efforts and budgets to acquire partners. What does a partner look like? A law firm. A partner could look like a VC. a partner could look like a payroll provider, for example, or an incorporation company. So we're out there investing our dollars to acquire partners that in return drive us customers in the repeatability and the predictability that we have from those channels and partners. So that's our general go-to-market philosophy. Now we think about growth and go-to-market.

12:19And so it sounds like these firms and these partners have some sort of hand in the business or some post of the business where they may hear, okay, we're going to shut down in a couple months or something's happening that they hear that, then they can pass that referral on to you. Exactly. So a lot of times when a company is going to shut down, one of the first people they call or the trusted advisors, their lawyer, right? And say, hey, I think I need to shut down. What do I do? And I think that we originally thought that law firms and lawyers would be our competitors. And I think what we're realizing today is that law firms and lawyers hate doing this.

12:51There's not a good ROI in terms of their time. they want to be spending their time and high growth clients and so today law offers one of our largest you know referral channels so yeah yeah they probably see it as i'm going to help these guys shut down and then maybe i'll get business from them if they start a new company or maybe not so yeah a lot of time there so i'm curious yeah pricey model they shut down they're gone but yeah tell us how you're pricing these transactions yeah so the way pricing works is it's a one-time platform fee. Again, that's not the dissolution buy. It's a one-time platform fee.

13:23You'll get on a call with us or go through our onboarding flow. We'll ask some questions about the company and we'll give you enough from pricing that includes all in everything that you'll need for the dissolution, the shutdown. So there's transparency and everything is very clear there. And so that's our core dissolution. And so there's no surprises, no billable hours. You're getting legal work and financial work back for you and it's all a one-time transparent fee. and and then on the asset hub side if you want to sell your assets you'll be able to come to us we'll get a sense what assets you have we'll actually give you a price what it's worth and it's your decision if you want to sell it or not so yeah we're very upfront and transparent i think we are at your moment in time where where predictability and cost are so critical in terms of what you can what it's going to cost you what you can make that we try to be very transparent and upfront about what it's going to cost and what are your options in terms of monetizing your assets.

14:16How would you describe your business model? Would you say we're peer services, we're tech-enabled services, or some people calling things like service as a software? How would you describe your business model? AI-driven software. AI-driven, okay. Yeah. We have, by the way, in the end, we operate, we're a software business, right? Half the company's R &D, if not more, and we build software technology stack to be able to automate and streamline scale to the scale we have, that doesn't mean that you don't have concierge-level support. So something we offer to every customer that comes on the platform for a solution, that we have a concierge team.

14:52They are there. They're available for you. They're answering questions via live chat. They have phone calls. They have onboarding calls. So we are there to give you that concierge-level support. But also the platform speaks for itself in terms of that, the UX, the UI, the robustness of it, but you still get concierge-level support. And so how do, say, you view it or your investors view it, say, a driven platform, right, with software, retention is a big deal. But in this case, they come in, you perform the service, then they're gone. Like, how do you, is that not even, is retention not even conversation?

15:26Or how do you put that in perspective? I think the perspective that we look at it is twofold. One is we operate in something called a recurring markets. So unlike a SaaS business that sells into a fine, if you're building a DevOps SaaS tool, right, you have a finite amount of 10 ,000 technology companies you can sell into, and that might go up a few hundred, go down a few hundred. But in a sense, you have a finite amount of companies. We operate in something called a recurring market, where no matter what we do, the inertia of every year, three and a half to four million new businesses are going to shut down.

15:56We have this recurring market. And so that's how we think about the business. And then the way we think about the recurringness is what doesn't change are the service providers that these businesses use. They're lawyers, they're accountants, they're investors, they're payroll provider platform, they're incorporation companies. And that's actually who the recurringness comes from and who we sell into and where we spend our efforts and energy. So, yeah, so we don't we don't look at ourselves as a traditional SaaS business. And but we have SaaS margins in terms of our gross margins. That's good. Yeah.

16:28Yeah. Yeah. in in at this stage of your business a few stats and figures before we wrap up here but do you have a favorite number or metric that you're focused on the guide the business and its current stage revenue that's all i'm right like revenue yes all right yeah financial from a business perspective revenue who we and there's a lot of other terminal metrics that we track from a customer like how much out how many hours have we saved customers how much money and we save customers Those are like more in terms of like things that we measure our impact with, right? Like time save for customers, asset revenue for customers.

17:03Like those are things that we do, but from like a pure metric in terms of once driving the business and how we make decisions, it's a lot revenue based. Okay. Yeah. Makes sense. And then what's your current team size? We're about 50 or so team members, I think 55 almost. Okay. And then are you disclosing any revenue numbers or revenue ranges? No. No, not right now. All right. And then where's your, do you have a headquarters location? You can say, all right, we're eight figures revenue, right? Eight figures. Okay, fair, fair. That's a great number. And then headquarters location or virtual? So we're hub-based.

17:37We have a headquarters in Santa Monica. So about a third of the team is in Santa Monica. We have an office in New York. So another third of the team is in New York. And then a third of the team is fully remote. Okay. All right. Perfect. All right. Dory, appreciate the time sharing your journey today. If listeners would like to learn more about Simple Closure, where should we send them online? They can go to our website, simplebludger.com. They can find me on LinkedIn, Doriona. They can find me on that. Yeah. And my email is doryatableludger.com so they can always email me. All right. Perfect. We'll put that in the show notes if you'd like to reach out and learn more.

18:08And again, Dory, appreciate your time and sharing your journey. Thank you for having me. Thanks.