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How to Be a Successful Failure The way you handle collapse determines how soon you start again.

By Sam Hogg

This story appears in the March 2016 issue of Entrepreneur. Subscribe »

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The CEO of a startup we funded called to tell us his tough decision: He had $1 million in the bank, and he was shutting down his company. Crazy, right? Not really. He had set a benchmark for progress and failed to reach it, and so he was returning the remaining capital to investors -- saving us all from making millions in wasted, additional investments. We were so impressed that we've since handed him the reins at two other problematic companies.

Some of my best experiences with CEOs were during the worst situations for their companies. Exiting gracefully takes precision and tact, and VCs will take notice. Here are the qualities I've come to admire in CEOs of struggling startups. You'd do well to adopt them yourself.

Honesty.