Offering the money back

We shut Vigilance down. The mechanism the product ran on is being removed from the platform, and there was no version of the company that survived that without becoming something else entirely.

Then we offered our investors their money back, to the extent there was money left. I've been told by more than one person that this was a mistake, and the arguments against are better than I expected, so let me make both cases.

The case against doing it#

That isn't what the money was for. They made a risk investment. The risk occurred. Returning capital when a bet doesn't pay off misunderstands what a bet is, and treating it as a debt you failed to repay is a category error about your own instrument.

It sets a strange precedent for you. If you return money when things fail, you've implicitly promised to do it again, and there will be a failure someday where you can't. Now you're either inconsistent or bankrupt.

Some of them don't want it. For an operator writing a small check, having their money returned after a shutdown is slightly awkward. It converts a clean loss into an accounting event and a conversation.

The runway had other uses. Money returned is money not spent on trying one more thing. There's a version where you pivot with the remaining capital and the investors would have preferred that.

Those are all real and I'd have trouble arguing anyone out of them.

Why I did it anyway#

I raised on a specific thesis and the thesis didn't fail — its foundation was removed. There's a difference between "we tried this and the market said no" and "the thing we built on was withdrawn." In the first case the money bought a real experiment and the answer is the return. In the second, the experiment didn't get to run. That distinction matters to me more than it apparently should.

Most of them invested in me, not in a spreadsheet. I raised from operators in the Shopify and DTC ecosystem, and I've written before that I wanted the names more than the cash. If you take money because people believe in you personally, the obligation you've incurred is personal too. That's not a legal position. It's just what I think is true.

This industry is small and long. I've been in the Shopify ecosystem since 2018 and in ecommerce since 2009, and everything good that's happened to me came from people knowing who I am. I'll be raising or selling or buying from some of these same people for the next twenty years. How I handled the failure is the only data any of them will have about what I do when things go badly.

I didn't want to spend money on denial. The remaining capital could have bought months of trying to rebuild the product on a foundation that doesn't support it. I've watched founders do that and the honest name for it is prolonging.

What it actually felt like#

Flatter than the story implies. There was no dramatic meeting. I wrote to people, explained what happened, and most of them replied some version of "this is how it goes, don't worry about it." Nobody was angry. A couple of them were more supportive than I'd earned.

The hardest part wasn't the money conversation. It was the two weeks before, when the decision was obvious and I hadn't made it, and I kept looking for a reading of the deprecation timeline that left something alive. There wasn't one. I'd known that since July.

What I'd tell someone in the same position#

Do it if you can afford to and if the reason feels true to you rather than performed. Don't do it as reputation management — people can tell, and it's the wrong reason even when it produces the right action.

And understand that the argument against is legitimate. Returning capital isn't obviously virtuous. It's a choice about what kind of counterparty you want to be over a long career in a small industry, and reasonable people make it the other way.

I'd make the same call again. I'd also stop telling myself it was uncomplicated.