This is a small essay on something we rarely talk about – venture death. It happens and it happens frequently. We don’t talk about it because VCs are eternal optimists, just like the entrepreneurs we back. But this is a business of opportunities, some realized, most not. What happens to the Nots?

We don’t have much of a vocabulary to talk about end games for companies. We talk of start-ups, pre-revenue, early stage. All these terms pre-suppose a future. The object of their description is a company in the birth phase. We do talk of ‘walking dead’ companies, but these are really companies that are stagnant. In a business that chants “grow or die”, these are the companies that resist both.

Death comes in many forms. The cleanest is the embryonic reabsorbtion of one company by another. The most difficult is the train wreck, when everyone finally wakes up from the delusion of success to realize the immediacy of failure. Doors are locked, creditors get in line, and the meager estate of the deceased is rationed to all the economic relatives who have a claim. In between is the ‘soft landing’ in which death occurs in an orderly way, where everyone has a chance to settle-up his or her final accounts.

Regardless of how it happens, venture death is never easy. Companies form from nothing and they return to nothing. Our precious code, intellectual property, and patents are so much ephemera when the business ceases. The contracts between investors, employees, customers, distributors and suppliers all disintegrate when the ecosystem is no longer vital. What is left is all there really ever was – the Idea.

The miracle of the process is that it is eternal. Entrepreneurs and employees often emerge from venture death with skills, knowledge, and insights that make them more successful in their careers. Most importantly, they form connections. This continuous composting of innovation is what makes Silicon Valley such a rich soil in which to plant seed-stage companies.

Turn, turn, turn.