The Graceful Exit: Lessons from TNW’s Founder on Planning for Both Success and Failure

AMSTERDAM – Boris Veldhuijzen van Zanten, founder of The Next Web (TNW), is overseeing the wind-down of his pioneering tech media and events company, a process he describes as both “painful” and “natural.” The move, announced recently, sees TNW’s media and events operations ceasing, with only its co-working space division, TNW Spaces, continuing to operate. The decision, following a 2019 acquisition by the Financial Times, underscores a growing trend of consolidation and restructuring within the digital media landscape, particularly as advertising revenue shifts and economic headwinds intensify.

The Counterintuitive Pitch That Secured Funding

Veldhuijzen van Zanten’s reflections on TNW’s closure are interwoven with a compelling anecdote from his early entrepreneurial days. Recounting a startup funding pitch from decades ago, he described a moment of unexpected candor that ultimately secured investment. Rather than solely focusing on potential triumphs, he boldly outlined a plan for a dignified exit should the venture falter – a “magnificent farewell dinner” for investors, even in the face of financial loss. This willingness to acknowledge potential failure, he explains, resonated deeply with a key investor, signaling honesty and a realistic assessment of risk.

“He told me it was refreshing to speak to an entrepreneur who was not blinded by his own pitch,” Veldhuijzen van Zanten wrote in his farewell piece. This approach, while unconventional, highlights a crucial element often overlooked in the high-stakes world of venture capital: the importance of contingency planning. It’s a lesson particularly relevant in today’s economic climate, where the International Monetary Fund projects global growth to slow from 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024, increasing the likelihood of startup failures.

Returning Capital: A Novel Approach to Downside Management

The initial startup, despite ultimately not achieving its ambitious goals, didn’t end in complete ruin. Veldhuijzen van Zanten and his team proactively offered investors a choice: a protracted and uncertain attempt at a pivot, or a return of approximately 40% of their initial investment, coupled with a celebratory dinner. The investors overwhelmingly chose the latter. This demonstrates a commitment to transparency and a willingness to prioritize investor interests, fostering trust that ultimately led to renewed investment in his subsequent venture. This proactive approach to downside management is a stark contrast to the often-opaque practices within the startup ecosystem, where investors frequently face total loss of capital.

The ability to return even a portion of invested capital is increasingly important. According to data from PitchBook’s Q2 2023 Venture Capital Report, venture capital dry powder (uninvested capital) reached a record $834.8 billion globally, yet deal activity has slowed significantly, creating pressure on startups to demonstrate tangible returns.

The Broader Implications for Business Leadership

Veldhuijzen van Zanten’s experience offers valuable insights for business leaders navigating an increasingly volatile economic landscape. The willingness to acknowledge potential failure, coupled with a pre-defined plan for mitigating losses, isn’t a sign of weakness, but rather a demonstration of responsible leadership. This approach builds trust with stakeholders – investors, employees, and customers – and can ultimately strengthen long-term relationships. The current environment, marked by rising interest rates, geopolitical uncertainty, and inflationary pressures, demands a more pragmatic and resilient approach to business planning.

The TNW story also highlights the challenges faced by independent media companies in the digital age. The acquisition by the FT, while initially promising, ultimately couldn’t sustain the entire operation. This reflects the broader struggles of the media industry to adapt to changing consumption patterns and the dominance of large tech platforms in the advertising market. The Statista reports that U.S. newspaper advertising revenue has declined steadily over the past two decades, falling from $49.3 billion in 2000 to $9.8 billion in 2022.

A “Good Ending” to a Notable Chapter

Veldhuijzen van Zanten frames TNW’s closure not as a failure, but as a “good ending” to a compelling story. He draws an analogy to finishing a good book – a bittersweet moment acknowledging the completion of a meaningful journey. He plans to continue writing through his Substack newsletter, promising a shift in focus but maintaining his commitment to insightful analysis. His final message is a testament to the importance of embracing both success and failure as integral parts of the entrepreneurial experience, and the enduring value of building strong relationships along the way.