Over the last 28 years, Sherwood Partners has become known as Silicon Valley’s go-to specialist in “assignment for the benefit of creditors” (ABC) – in other words, the company helps fledgling startups sell off their assets, titles, and property to a trustee.
The firm’s co-founder, Martin Pichinson began working in the tech industry in the mid-80s and has garnered a reputation as the "Undertaker of Silicon Valley." He’s earned this and other death-related monikers like the “grim reaper” or “terminator” for his methodical selling off of parts from failing startups, starting with the dot-com bubble. "If there's no revenue incoming and there's no money investing, the company is basically insolvent and out of business," Sherwood Partners co-founder Martin Pichinson told NPR this year. "We basically come in and clean up the messes."
In 2017, the stock market had been on an upswing and with startups getting funded left and right Sherwood was seeing two to four companies wind-down a week— the slowest they had been in some time.
Though, as COVID-19 creates a devastating wave of layoffs and furloughs, Sherwood Partners is thriving. In an interview with Tech Crunch Pichinson revealed that the company is now winding down two to three companies each day.
According to Layoffs.fyi, a San Francisco-based layoff tracker, since the coronavirus was declared a pandemic almost 350 startups have laid off more than 30,000 employees.
“We’re in companies that raised $10 million to $25 million, to companies that raised up to $1.5 billion. It doesn’t matter what size they are; when they come to us, they’re all broke. If we’re closing it down to clean up and monetize what we can, they are basically in the same position, whether they raised $20 million or they were once a billion-dollar business,” Pichinson explained.
What makes Sherwood the industry’s go-to clean up crew is its covert and confidential approach. Pichinson never reveals what businesses he’s closing, nor does he relish it. “I am the guy who closed down a lot of the high-flying dot coms,” Pichinson told The Guardian in 2018, “not without a note of pride,” the publication noted.
While startups that focus on things like telemedicine, remote communication, and conferencing, as well as food delivery services, are experiencing an upswing, others are not. Lay-offs and furloughing have affected startups like Yelp, Groupon, Lyft, and scooter company, Bird.
Pichinson is sensitive to the position he holds and unsurprisingly wants to shed his "Dr. Death" reputation. "I really see myself as the Mayo Clinic," Pichinson explains. "I'm a caregiver in the ICU. I'm gentle. I really do feel bad for these companies. But we do all we can to ease the pain of the process."