Not every startup investment works out, but it is important for a corporate investor to exit the relationship gracefully and without ruining their reputation.
Every corporate investor eventually faces “the talk.” The one where you realise the startup you once adored has pivoted, burned through cash, and now sends quarterly updates that just don’t matter. You know it’s time to move on—but how do you do it without torpedoing your reputation or starring in a LinkedIn vent post?
Let’s face it—not all corporate love stories are meant to last. Some start with fireworks, others with a slick demo day pitch. But just like any relationship, your connection with a startup can fizzle, stall, or turn toxic over time. And when it’s time to part ways, you want to do it with grace, dignity, and as few memes about you on X as possible.
Breaking up with a portfolio company is an art form. One wrong move, and you go from “valuable strategic partner” to the villain. The venture community is small and word travels fast—think Mean Girls, but with cap tables. Play it wrong, and the whole cafeteria is whispering.
Remember: you’re not just breaking up with a CEO and the company; you’re breaking up with a syndicate. You’ll need to communicate with everyone around the table to ensure the message is consistent. They are not your friends—they each have different incentives when it comes to placing blame.
If you need proof that corporate VC breakups can go nuclear fast, look no further than these high-profile tales:
Spotlight Therapeutics (2025): CVC: Google Ventures
A gene-editing dream dimmed. After years of buzz around its “cell-targeted” CRISPR platform, Spotlight stumbled in human trials for eye diseases—its precision edits just didn’t stick. The biotech quietly wound down despite deep pockets from its CVC.
Lesson: Science always gets the final vote. When the data disappoints, even star investors can’t rewrite the results.
Pear Therapeutics (2023) CVC: Novartis Venture
A digital health darling that lost its pulse. Pear set out to reinvent medicine with “prescription digital therapeutics,” turning apps into treatments for addiction, insomnia, and mental health. The FDA gave its blessing—but payers didn’t, and the company’s revenue model flatlined. Bankruptcy came just four years after its $1.6B SPAC debut.
Lesson: Regulatory wins don’t guarantee commercial survival. In digital health, even proven science can’t outlast a broken reimbursement system.
Convoy (2023) CVC: Salesforce Ventures
A logistics unicorn that ran out of road. Convoy was the poster child for digital freight—an AI-driven platform matching shippers with truckers in real time. But as freight demand plunged and capital markets froze, Convoy’s high-burn model couldn’t weather the downturn, and operations halted abruptly.
Lesson: Scale only matters if the market holds steady. When the economy slams the brakes, even billion-dollar backers can’t keep the engine running.
In the end, what people remember isn’t the fallout—it’s how you handle it. That’s what decides whether you walk away scarred or respected.
Luckily, I’ve got a few tips to help you exit with your reputation—and your inbox—intact.
Tip 1: Read the room (and the cap table)
Before you do anything rash, make sure you’re not still the largest investor. Nothing says “awkward” like dramatically exiting a company where you still sit on the board and own 30 % of the preferred stock.
Before you bow out, check:
- Your equity position—by class. If you’re still heavily vested, consider easing out gradually instead of disappearing overnight.
- Board obligations—can you shift from a voting seat to an observer role or advisory capacity? That keeps continuity without full commitment.
- Contractual ties—look for rights of first refusal or “strategic alignment clauses” (a.k.a. buzzword handcuffs). If they’re still binding, help line up a new strategic investor to take your place before you go.
The goal: fade out gracefully, don’t vanish like Houdini.
Tip 2: Avoid the “It’s not me, it’s you” talk
Sure, the startup pivoted 18 times, burned $14m, and now sells AI-powered dog vitamins. Resist the urge to play the blame game.
Go full corporate diplomat:
“We love what you’re building—it’s just not aligned with our evolving strategic priorities.”
Translation: we still want to be friends, but please stop sending Series D pitch decks.
Tip 3: Don’t ghost (unless you like LinkedIn shame posts)
If you’ve been quietly ignoring the startup for weeks, and hoping they will “take the hint,” congrats—you’re now the bad ex.
Founders remember everything, especially the time you said, “we’re totally in for follow-on!” before disappearing like a well-dressed phantom.
Instead, schedule a candid check-in:
- Be respectful
- Be direct
- Be human
Even if the answer is “we’re no longer participating,” give them closure—not a silent exit and a mysteriously deactivated Slack channel.
Tip 4: Use buzzwords like a Jedi mind trick
CVCs are fluent in euphemism. Deploy your arsenal:
- “Realigning innovation priorities”
- “Focusing our portfolio on core adjacencies”
- “Shifting from capital deployment to capability transfer”
By the end, they’ll feel corporately dumped—but with enough grace that they might just thank you for it, realising it was the right move all along.
Tip 5: Don’t pull the “strategic fit” card too late
Nothing stings like a startup realising they were just a brand-halo investment.
If there was never a real integration path, don’t pretend the breakup stems from a sudden misalignment. That’s like dating someone for two years then saying, “Wait—you don’t like sushi?”
Own your shift. If your CEO’s new favorite McKinsey report caused a pivot, just say so.
Tip 6: Send introductions
Breakups don’t have to end in silence. Don’t disappear like a stolen lunch from the office fridge.
Be the ex who helps.
- Introduce new investors
- Suggest commercial partners
- Offer a supportive quote for their next press release
Do this, and you’ll be remembered as a pro—not a punchline in the founder group chat.
Tip 7: Don’t weaponise your corporate weight
Yes, you have an army of lawyers and a 38-page slide deck proving breach of “Clause 6.B.”
Cool.
Still, don’t wield it like a hammer.
CVCs can seem intimidating—keep your tone collaborative. Unless the founders are pivoting to cat-NFTs again, stay constructive.
Tip 8: Brace for an odd board meeting
It’s the one where you say you’re pulling back, and the founders look like you just left them at the altar.
Be professional. Bring snacks. Expect:
- Death stares
- Awkward silences
- Passive-aggressive questions about your “innovation strategy”
Smile. Nod. Remember: board minutes are forever.
Tip 9: Exit gracefully (and legally)
You can’t just yell “UNCOUPLE!” and walk into the mist. Review your obligations, check your exit strategy:
- Tag-along / drag-along rights
- Information-sharing duties
- Board attendance (even if your “camera issues” are suddenly frequent)
Consult legal. Be precise. No one wants their breakup to turn into Law & Order: CVC Unit.
Tip 10: Reflect — and swipe smarter next time
When the dust settles, ask:
- Did we overpromise value?
- Were we clear about strategic fit?
- Did we invest because someone liked the logo?
Corporate venture isn’t Pokémon—it’s not about collecting shiny logos. Find sustainable alignment next time. Maybe even date before you invest.
Conclusion: Don’t be the villain—be the adult
Breaking up doesn’t have to end in drama or scorched bridges. Done right, it can be professional, humane, and even mutual.
Remember:
- Be honest, not harsh
- Be strategic, not shady
- And never text your regrets when they raise a massive round from another corporate and you suddenly “miss them.”
Because in CVC, breakups echo—and screenshots live forever. So break up cleanly, kindly, and for the love of all things strategic… never put “per my last note” in the subject line.
I’d love to hear your thoughts. If my opinion resonates with you or raises questions, let’s continue the conversation. Feel free to share your comments, feedback, or experiences with me on LinkedIn where I will also be posting on CVC Compass.
Bill Taranto is president of MSD Global Health Innovation Fund and vice president of MSD Global Health Innovation Group. MSD GHIF has $600M under management and provides growth capital to companies that improve healthcare delivery and services.
