--- title: "Distressed Startup: Next Steps & Survival | Hypergility | Hypergility" description: "Managing a distressed startup? Hypergility supports founders in preserving value and planning the next successful chapter." lang: en json-ld: | [ { "@context": "https://schema.org", "@type": "WebPage", "name": "Distressed Startup: Next Steps & Survival | Hypergility", "description": "Managing a distressed startup? Hypergility supports founders in preserving value and planning the next successful chapter.", "url": "https://hypergility.com/personas/distressed", "datePublished": "2026-05-17T14:49:56.36+00:00", "dateModified": "2026-05-17T23:04:56.367901+00:00", "isPartOf": { "@type": "WebSite", "name": "Hypergility", "url": "https://hypergility.com" } }, { "@context": "https://schema.org", "@type": "Article", "headline": "Distressed Startup: Next Steps & Survival | Hypergility", "description": "Managing a distressed startup? Hypergility supports founders in preserving value and planning the next successful chapter.", "datePublished": "2026-05-17T14:49:56.36+00:00", "dateModified": "2026-05-17T23:04:56.367901+00:00", "author": [ { "@type": "Person", "name": "Cris Iyer", "jobTitle": "Founder" } ], "mainEntityOfPage": "https://hypergility.com/personas/distressed", "image": "/heroes/personas/distressed.webp", "citation": [ { "@type": "CreativeWork", "name": "GOV.UK Insolvency Service", "url": "https://www.gov.uk/government/organisations/insolvency-service" }, { "@type": "CreativeWork", "name": "Companies House", "url": "https://www.gov.uk/government/organisations/companies-house" }, { "@type": "CreativeWork", "name": "British Business Bank", "url": "https://www.british-business-bank.co.uk/" } ], "publisher": { "@type": "Organization", "name": "Hypergility", "logo": { "@type": "ImageObject", "url": "https://hypergility.com/og-default.jpg" } } }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "How do I know if my startup is officially insolvent?", "acceptedAnswer": { "@type": "Answer", "text": "In the UK, insolvency is triggered if you can't pay debts as they fall due or if your liabilities outweigh assets on the balance sheet. Under the Insolvency Act 1986, continuing to trade while insolvent can lead to personal liability for directors. Don't wait; if your cash runway is under 30 days, legal advice is mandatory." } }, { "@type": "Question", "name": "Can I still sell the IP if the company is failing?", "acceptedAnswer": { "@type": "Answer", "text": "Yes, but it must be at 'fair market value' to avoid being flagged as a transaction at an undervalue. If you sell assets to a new entity for pennies, liquidators can claw them back up to 2 years later. Document every valuation to prove you acted in the best interest of creditors." } }, { "@type": "Question", "name": "What happens to my R&D tax credit claims in distress?", "acceptedAnswer": { "@type": "Answer", "text": "If you enter formal liquidation or administration, HMRC generally stops processing R&D tax credit payments. However, if you are in a 'going concern' rescue phase, you can often still claim. It is vital to file these claims early, as they can provide a non-dilutive 18.6% to 33% cash injection when you need it most." } }, { "@type": "Question", "name": "Am I personally liable for the company's debts?", "acceptedAnswer": { "@type": "Answer", "text": "Generally, no, thanks to limited liability. However, you lose that protection if you've signed personal guarantees on loans or if you are guilty of 'wrongful trading.' Since 2021, HMRC has also regained 'secondary preferential creditor' status, meaning they get paid before floating charge holders and unsecured creditors. Keep your tax filings current." } }, { "@type": "Question", "name": "Should I go for a CVA or a Pre-pack Administration?", "acceptedAnswer": { "@type": "Answer", "text": "A Company Voluntary Arrangement (CVA) allows you to keep control while paying back debts over time, but it requires 75% creditor approval by value. A Pre-pack Administration sells the business and assets immediately to a new vehicle. While faster, Pre-packs face heavy scrutiny from the 'Pre-pack Pool' to ensure the deal is transparent and fair." } } ] } ] --- [![Hypergility](/assets/hypergility-logo-BKOgRT51.png)for bold startups ](/) Services [Startup Grower](https://startupgrower.hypergility.io/)[Website Build](/build-your-website)[Public Sector Bids](/offerings/win-public-sector-bids)[Management Systems & Assurance](/services/management-systems) Who it's for [Are you a bold founder?](/are-you-a-bold-founder)[Innovation Hubs](/partners/innovation-hubs)[Universities](/partners/universities)[Researchers](/personas/researchers) [Why us](/why-us)[News](/news)[Try Startup Grower](https://startupgrower.hypergility.io/)[Contact](/contact) ![](/heroes/personas/distressed.webp) Short runway, still choosing # Distressed Down to the wire. Preserve what's real, choose the next chapter. [Try Grower](https://startupgrower.hypergility.io)[Talk to us](/contact) Make the next move ## Pressure-test it in an hour Use Grower to scope the bet, or book a call with us. [Try Grower](https://startupgrower.hypergility.io)[Book a call](/contact) Talk to us ## Got questions? Let's get specific. Book a 30-minute call. We'll map your situation and show the fastest next step. [Book a call](/contact) > “If you're going through hell, keep going.” — Winston Churchill , Former UK Prime Minister ## FAQs ### How do I know if my startup is officially insolvent? ### Can I still sell the IP if the company is failing? ### What happens to my R&D tax credit claims in distress? ### Am I personally liable for the company's debts? ### Should I go for a CVA or a Pre-pack Administration? Next step ## Ready to move? Try Grower or book a call — whichever feels right. [Try Grower](https://startupgrower.hypergility.io/)[Book a call](/contact) TL;DR - Distressed doesn't mean dead; it means the margin for error just hit zero. - Preserve core value before the burn swallows every viable exit path. - Face the numbers daily—denial is the fastest route to total liquidation. - Prioritize creditors and staff obligations to keep your personal reputation intact. - Pivot hard or exit clean; middle grounds lead to messy legal fallout. - Your next venture depends on how honorably you handle this crisis today. ## Sources 1. [GOV.UK Insolvency Service](https://www.gov.uk/government/organisations/insolvency-service) 2. [Companies House](https://www.gov.uk/government/organisations/companies-house) 3. [British Business Bank](https://www.british-business-bank.co.uk/) Trusted by clients & partners ## Clients and partners we work with [![Sussex Innovation](/trusted-logos/sussex-innovation.png)](https://www.sussexinnovation.co.uk/)[![Aqueous Digital](/trusted-logos/aqueous-digital.png)](https://www.aqueous-digital.co.uk/)[![The Growth Orchard](/trusted-logos/growth-orchard.png)](https://thegrowthorchard.co.uk/)[![GovForms](/trusted-logos/govforms.png)](https://govforms.co.uk/)[![SITA](/trusted-logos/sita.png)](https://www.sita.aero/)[![University of Sussex](/trusted-logos/university-of-sussex.png)](https://www.sussex.ac.uk/) As seen at ## Where we show up in the community [![BrightonAI Show and Tell](/trusted-logos/brightonai.png)](https://brightonai.org) Certifications ## Standards we are independently certified against [ ![ISO 9001 Badge](/assets/iso-9001-DeXtyob9.svg) ISO 9001 Quality Management ](/we-are-iso-9001-company-certified)[ ![ISO 27001 Badge](/assets/iso-27001-BiHzm-R-.svg) ISO 27001 Information Security ](/we-are-iso-27001-company-certified)[ ![ISO 42001 Badge](/assets/iso-42001-WNouqNfX.svg) ISO 42001 AI Management System ](/we-are-iso-42001-company-certified)[ Cyber Essentials UK Cyber Security ](/we-are-cyber-essentials-certified)[ Cyber Essentials Plus Independently verified ](/we-are-cyber-essentials-plus-certified) [![Hypergility](/assets/hypergility-logo-BKOgRT51.png)](/) People and our AI companion — challenging you, not just agreeing Making ideas investable For founders — we help you shape it, set it up, build it and monetise it. [Try Grower](https://startupgrower.hypergility.io/)[](https://www.linkedin.com/company/hypergility) #### Starting out Lane overviews - [Starting out](/starting-out) - [Are you a bold founder?](/are-you-a-bold-founder) - [The Startup In You](/the-startup-in-you) - [Resources in play](/resources-in-play) Stepping up - [Overview](/stepping-up) - [Researchers](/personas/researchers) - [Sales rainmakers](/personas/sales-rainmakers) - [Tech wizards](/personas/tech-wizards) - [Domain experts](/personas/domain-experts) - [Creative designers](/personas/creative-designers) - [Voluntary redundancy](/personas/voluntary-redundancy) - [Retiring, not done](/personas/retiring-not-done) No job, need a path - [Overview](/no-job-need-a-path) - [Made redundant](/personas/made-redundant) - [End of contract](/personas/end-of-contract) - [Mutually parted ways](/personas/mutually-parted-ways) - [Resigned](/personas/resigned) - [Pushed out, can't get back](/personas/pushed-out-cant-get-back) - [Overqualified / age barriers](/personas/overqualified-age-barriers) - [Returning after a break](/personas/returning-after-break) - [Retired, need income](/personas/retired-need-income) - [Never employed](/personas/never-employed) - [Grads, no offers](/personas/grads-no-offers) Fitting it in - [Overview](/fitting-it-in) - [Students / college](/personas/students) - [Side hustlers](/personas/side-hustlers) - [Work returners](/personas/work-returners) - [Career changers](/personas/career-changers) - [Family duties](/personas/family-duties) - [Health / disability barriers](/personas/health-disability-barriers) - [Post-prison](/personas/post-prison) - [Underrepresented founders](/personas/underrepresented-founders) #### Resources in play Lane overviews - [Resources](/resources) - [Roadmap](/roadmap) - [News & insights](/news) Short runway - [Overview](/short-runway) - [Cash crunch](/personas/cash-crunch) - [Turnaround / restructure](/personas/turnaround) - [Distressed](/personas/distressed) - [Preserve, or pivot](/personas/preserve-or-pivot) Resourced and reloading - [Overview](/resourced-and-reloading) - [Successful exiters](/personas/successful-exiters) - [Go-again success seekers](/personas/go-again) - [Post-raise reset](/personas/post-raise-reset) - [Pre-series A](/personas/pre-series-a) - [Grant-funded R&D](/personas/grant-funded-rd) - [Money inheritors](/personas/money-inheritors) Struggling with investors - [Overview](/struggling-with-investors) - [Pitch isn't landing](/personas/pitch-not-landing) - [Wrong room, wrong investors](/personas/wrong-room) - [Term-sheet stalled](/personas/term-sheet-stalled) - [Bridge or down-round](/personas/bridge-or-down-round) - [Post-rejection reset](/personas/post-rejection-reset) #### Startup Grower - [Grower overview](/grower) - [Validate](/grower/validate) - [Pitch](/grower/pitch) - [First customer](/grower/first-customer) - [Brand site](/grower/brand-site) - [Open Grower app](https://startupgrower.hypergility.io/) - [Website Build](/build-your-website) - [Public Sector BidsLater ](/offerings/win-public-sector-bids) - [All offerings](/all-offerings) - [Pricing](/pricing) - [Roadmap](/roadmap) #### Capabilities - [AI safety](/ai-safety) - [R&D claims](/rnd-claims) - [Smarter IP](/smarter-ip) - [Trust & certifications](/trust) #### Company - [Privacy](/privacy-policy) - [Cookies](/cookie-policy) - [Terms](/terms-of-use) - [Use policy](/use-policy) - [ICO registration](/ico-registration) - [AI ethics](/ai-ethics) - [IP statement](/ip-statement) - [Image attribution](/image-attribution) #### Company - [Home](/) - [What we do](/what-we-do) - [Why us](/why-us) - [Contact](/contact) - [News](/news) - [Roadmap](/roadmap) - [Sitemap](/sitemap) - [llms.txt](/llms.txt) - [Trust & certifications](/trust) #### How we work [ Do it yourself Self-serve with Grower ](/do-it-yourself)[ Do it with you Coaching & expert sprints ](/do-it-with-you)[ Do it for you Done-for-you delivery ](/do-it-for-you)[ Do it with a partner Vetted specialist network ](/do-it-with-a-partner) #### Offerings Tap any card for the dedicated page. Status shown on each. Launch sequence — earliest to latest Live shipping today — buy or book now › Next in build, launching soon › Later scheduled, design stage › On radar validated demand, no date yet [Shape](/shape) Pressure-test the idea - [Is my idea any good?Live ](/offerings/is-my-idea-any-good) - [Bootstrap your runwayLive ](/offerings/bootstrap-your-runway) - [Validate fastLive ](/offerings/validate-fast) - [Size the prizeNext ](/offerings/size-the-prize) - [Competitor intelligenceNext ](/offerings/competitor-intelligence) - [Nail the pitchLive ](/offerings/nail-the-pitch) [Set-up](/set-up) Get the foundations right - [Incorporate & structureLive ](/offerings/incorporate-and-structure) - [Cap table & equityNext ](/offerings/cap-table-and-equity) - [Tax-efficient share schemesOn radar ](/offerings/tax-efficient-share-schemes) - [Claim R&D creditsLive ](/offerings/claim-randd-credits) - [SEIS/EIS advance assuranceLater ](/offerings/seis-eis-advance-assurance) - [Signal EquityNext ](/offerings/signal-equity) [Build](/build) Ship what customers want - [Ship the productLater ](/offerings/ship-the-product) - [Get found onlineNext ](/offerings/get-found-online) - [Win grants & innovation loansLater ](/offerings/win-grants-and-innovation-loans) [Monetise](/monetise) Turn traction into revenue - [Win first customersNext ](/offerings/win-first-customers) - [Pricing & business modelNext ](/offerings/pricing-and-business-model) - [Buyer-ready sales decksNext ](/offerings/buyer-ready-sales-decks) - [Activate IP for partnershipsLive ](/offerings/activate-ip-for-partnerships) - [Win public sector bidsLater ](/offerings/win-public-sector-bids) - [C-suite distribution networkOn radar ](/offerings/c-suite-distribution-network) #### Partner network Advisors & Professionals - [Accountants & advisors](/partners/accountants) - [Lawyers & legal advisors](/partners/lawyers) - [Agencies & consultants](/partners/agencies-and-consultants) - [Independent consultants](/for-consultants) Capital & Community - [Investors, angels & syndicates](/partners/investors) - [Founder communities & networks](/partners/communities) - [Trade associations](/partners/trade-associations) Innovation & Education - [Universities & TTOs](/partners/universities) - [Innovation hubs & incubators](/partners/innovation-hubs) - [Accelerators](/partners/accelerators) - [Tech & integration partners](/partners/tech-and-integration-partners) Workforce Transitions - [Outplacement agencies](/for-outplacement-agencies) - [HR & redundancy teams](/for-employers-redundancy) #### Registered Hypergility Hypergility Ltd & Hypergility Innovations Ltd [help@hypergility.com](mailto:help@hypergility.com) Trading address Science Park Square Brighton BN1 9SB Registered office 66 Paul Street London England EC2A 4NA #### Independently certified [![ISO 9001](/assets/iso-9001-DeXtyob9.svg)ISO 9001 ](/we-are-iso-9001-company-certified "ISO 9001")[![ISO 27001](/assets/iso-27001-BiHzm-R-.svg)ISO 27001 ](/we-are-iso-27001-company-certified "ISO 27001")[![ISO 42001](/assets/iso-42001-WNouqNfX.svg)ISO 42001 ](/we-are-iso-42001-company-certified "ISO 42001")[CE Cyber Essentials ](/we-are-cyber-essentials-certified "Cyber Essentials")[CE+ Cyber Essentials Plus ](/we-are-cyber-essentials-plus-certified "Cyber Essentials Plus") © 2016 - 2026 Hypergility Ltd. 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