skull.jpgPE Hub’s Connie Loizos has an interview with Martin Pichinson, co-founder of Sherwood Partners, known to VC industry veterans as “the undertaker” for its speciality in shutting down failed companies. As one might imagine, Sherwood’s business is booming:

In January of 2007, the firm was being asked to take on three new clients a month. Fast forward to today and it’s taking on three to four newly imploding companies every week. Most of them are Web 2.0 startups backed by Valley VCs, but Sherwood also counts Google and Microsoft as clients.

I reached Pichinson — an extroverted 62-year-old who once managed musical acts and tends to pepper his speech with words like “caca” — yesterday, after he returned from a three-week trip to Poland. Here’s part of that conversation:

How long does it take you to wind down a company?

If we restructure the company — try to save it, it’s anywhere from 3 months to 12 months. If we close it, it takes up to a year because of all the legal ramifications.

Where are these startups, and their backers, going wrong?

Well, you’ve got to start bringing in companies like Sherwood early to work with managers and help shave off costs. It’s all about extending the runway long enough that customers can absorb a product. Everyone comes up with this cockapoo about startups. It’s not about being smart. It’s about being around long enough.