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First published on 12 July, 2026
For more than a decade, venture capitalists and founders have clung to the belief that if a high-growth startup runs out of cash, its proprietary technology will retain enough value to soften the blow. An administrator can sell the company’s code, platform, or data to a strategic buyer and recover at least part of the investment. It is also often wrong.
When a tech startup fails, its assets are worth only what a buyer can legally use. Delivery trucks depreciate. Custom software can become a liability. If a company’s data practices, licences or regulatory compliance are flawed, even technology developed at significant cost may become unsaleable. In insolvency, regulatory compliance, rather than intellectual property, often determines whether any value remains.
Originally published by TechCabal.