Startup shutdown checklist: where AI data fits

Decide on the data before you close the accounts.

Decide what happens to your company data before you delete accounts, cancel Slack or let subscriptions lapse. Those steps start export clocks and delete records. A data license needs the records to still exist.

Eleven steps below run in order. The sources are vendor terms, Delaware statutes and a shutdown service's own advice. Take this checklist to your lawyer. It is not legal advice.

In plain words

Data licensing means a company gets to use your records for a while, under rules.

Think of it like this

Think of the attic. Before you clear the house, look in the boxes. Once the dumpster comes, they are gone.

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What does the data decision cover?

You have four options. Keep an export for the record. License the data. Hand it to the buyer of the company in an asset sale. Or delete it. A closing company can pick more than one for different data, such as licensing chat and deleting payroll.

Some of it has buyers. Gizmodo reported that SimpleClosure had processed nearly 100 deals in a year at $10,000 to $100,000 per company.

BigGo reported that Mercor offered up to $300,000 to failed and acquired startups. Those are company and press claims, and no outcome is promised. Our page on AI labs buying startup archives has the reporting.

What is the order of the checklist?

Freeze deletion. Pause account closures and auto-delete retention settings. Slack's export help page says what you can export depends on your plan.
List every system and its size. micro1's data manifest form, as David Revland, who works on human data at micro1, described it in an undated recorded forum talk, asks which tools you use and rough sizes per tool.

So the list doubles as your first intake conversation. See the data manifest form.
Find out who can export, and on which plan. Slack's Free and Pro plans export public channels only.

Business+ and Enterprise can request private channels and direct messages. Zendesk exports are off by default until the account owner asks Zendesk support to enable them.
Write down each export clock. Salesforce gives you 30 days after termination to ask for your Customer Data.

Its Data Export Service deletes zip files 48 hours after the email goes out. Zendesk download links last at least three days. See Salesforce and Zendesk.
Pull the contracts. Customer agreements, NDAs, vendor terms, investor documents and employee policies can all limit a license. Start with the rights check and our page on NDAs.
Get the corporate approvals. For a Delaware corporation, section 271 ties a sale of all or substantially all property to board action and a stockholder vote. Section 275 sets the dissolution vote. Read our Delaware walkthrough.
Choose a route. Pick a shutdown service such as the Asset Hub, a listing board such as BuyMyDeadStartup, or a direct program. Compare them in startup data routes and SimpleClosure alternatives.
Check the buyer. SimpleClosure's CEO, Dori Yona, wrote that founders should look up the buyer's history. Ask whether it has completed a deal with another startup. Find out whether it uses the data or buyers the deal.
Limit what you share. The same advice says to avoid sharing full exports before meaningful offers.

Share limited samples first, and search for embedded credentials such as API keys. It says scrubbing a dataset is more work than exporting it and deleting a few names.
Get the money terms in writing. Ask for specific prices instead of ranges, payment timing, which company is legally obligated to pay and where the funds come from. Read reps and warranties and who is liable if the buyer is hacked.
Record the decision, then close the accounts. Keep the counsel notes and the board record.

Frankfurt Kurnit Klein and Selz says that if the company is later acquired, a prior data license will come up in diligence. An acquirer will expect to see the record. Keep it with the deal file.

What happens to creditor claims after a startup dissolves?

A Delaware corporation continues as a legal entity for three years after dissolution to settle its business and defend suits (section 278). Section 280 sets notice to creditors, with at least 60 days to submit claims. Section 281(b) sets a plan for paying claims in priority.

Under section 281(c), directors who follow section 281 are not personally liable to claimants. We found nothing on how far that shield reaches over privacy claims.

The people in your messages are still people. Customer and partner contracts continue after the company stops. See whether a shutting-down company can license its Slack for what your staff may object to.

The state and federal filings run alongside the data decision. The state-by-state dissolution table gives each state's form and fee, and the final tax return when closing a business lists the IRS forms in order.

Some records have to outlive the company. Our page on what to do with company records when you close gives the federal keep periods for tax, payroll and hiring records.

What if the company is in bankruptcy?

A bankruptcy adds a court. In some sales it also adds a consumer privacy ombudsman. The ombudsman exists only when the debtor's privacy policy barred transferring personal information to unaffiliated parties, under 11 U.S.C. 363(b).

The Spirit Airlines sale is the live example. See what is a consumer privacy ombudsman and the Spirit Airlines page.

An insolvent company can also wind down under state law, without a bankruptcy court. Our page on an assignment for the benefit of creditors covers what happens to the data there.

What if you do nothing with the data?

Subscriptions lapse and vendors delete it on their own schedules. The Salesforce agreement says it deletes or destroys copies after the 30-day period.

For that data the default outcome is deletion. Deleting is a valid decision too, as long as someone made it on purpose and wrote it down.

Doing nothing with the company itself costs more. Our page on closing a business and walking away adds up the fees and taxes an unfiled company keeps owing.

What should you do this week?

List your systems and who can export from each. Run the rights check. Then run the free fit check to see whether buyers' published thresholds fit. If you want the file assembled for your lawyer, see our managed readiness service.

Talk to a corporate or insolvency lawyer and a privacy lawyer in your state before you sign anything.

Vaultfish helps you run the process. We are not lawyers and this is not legal advice. If you need counsel who knows this area, we can point you to one. Ask for a referral