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Sprinkles® Closed: Now What?
- Cynthia Nevels
- Jan 14
- 4 min read
January 14, 2026 by Start.Pivot.Grow. | Register for GrowthTech '26 Now
Looking at the recent closures of The Biscuit Bar and Sprinkles Cupcakes, I need to share some hard truths about private equity that nobody talks about at pitch competitions or accelerator programs.
After 25 years in this game—from Silicon Valley's dot com era to advising Goldman Sachs affinity program companies to writing literally the book on PE for women—I've seen this movie too many times. Great founders. Solid brands. Wrong capital structure. Game over.
Let me break down what actually happens when you take institutional money, because what you think you're signing and what you're actually signing are two very different things.
The Money Isn't Really Yours
Here's what most founders miss: When you take PE money, you're not getting a partner—you're getting a new boss. And that boss has a boss (their LPs) who expects specific returns in a specific timeframe.
I've sat in those partner meetings. The conversation isn't about your brand story or customer love. It's about IRR, exit multiples, and how fast they can flip your company. Your 10-year vision? They're thinking 3-5 years max.
The Biscuit Bar thought they had a rescue deal lined up. What they actually had was a complex web of stakeholders—landlords, lenders, potential buyers—who all needed to agree. When even one said no? The whole house of cards collapsed. That's not bad luck.
That's bad structure.
Control Is an Illusion After the Check Clears
You know what "reserved matters" are? They're the list of things you can't do without permission. And trust me, that list is longer than your last grocery receipt.
Want to close an underperforming location? Board approval. Need to renegotiate a lease? Board approval. Planning a pivot? You better believe that's board approval.
Sprinkles' founder learned this the hard way. She built that brand in her kitchen after being laid off from her job at an investment banking firm in the San Francisco Bay area, sold it in 2012, and watched from the sidelines as PE shut down every bakery on December 31st. No ownership means no vote. Period.
In my work with Start.Pivot.Grow. and Integrality entrepreneurs, I see founders negotiate everything except the one thing that matters: who controls the off switch. You can be CEO all day long, but if you don't control major decisions, you're really just middle management with a fancier title. That's no shade, that's reality and sometimes founders are so tired and mentally worn out they'll take the title and the money to be free of the headache. It doesn't mean they don't love their brand. Operating a business and scaling takes a toll.
The Optimization Playbook Always Looks the Same
PE firms have a formula, and it works—for them:
Centralize everything (goodbye local suppliers)
Cut labor costs (hello skeleton crews)
Standardize operations (farewell to what made you special)
Focus on EBITDA over everything else
They'll tell you it's about "operational excellence." What they mean is they're going to run your business like a spreadsheet, not a brand.
I've watched this happen to companies in Goldman Sachs programs, my Integrality clients and 10,000 Small Businesses alumni. The ones who survive are the ones who negotiate operational protections upfront—minimum staffing ratios, quality standards that can't be touched, brand elements that are sacred. Everything else is fair game.
Three Non-Negotiables Before You Sign Anything
After helping founders navigate these waters, here's what you absolutely must lock down:
1. Define Your Nuclear Options Don't just ask "What happens if things go bad?" Ask specifically:
Who can force a sale?
Who can file for bankruptcy?
Who decides when to pull the plug?
Get it in writing. If they won't put it in writing, you have your answer.
2. Protect Your Non-Negotiables in the Documents
Not in emails. Not in verbal agreements. In. The. Documents.
If your secret sauce is your grandmother's recipe, that recipe better be protected. If your differentiator is your employee culture, minimum training hours better be specified. If your brand promise is quality, your ingredient standards need contractual protection.
3. Plan Your Exit Before You Enter
This is the part nobody wants to hear: If you're not willing to watch someone else run your company into the ground, don't sell control. Keep 51%. Take less money. Find alternative financing.
I tell every founder in our accelerator programs the same thing: There's no amount of money worth watching your life's work get dismantled by someone who sees it as cells in a spreadsheet.
The Bottom Line
Look, I'm not anti-PE. I wrote a whole book helping people (women) access it that will be released in March 2026. But I'm anti-surprise, and I'm anti-founders getting steamrolled because nobody told them how this actually works.
The Biscuit Bar and Sprinkles aren't cautionary tales about bad businesses. They're cautionary tales about misaligned incentives and possibly poorly structured deals. The money might save you today, but the terms will own you tomorrow.
Before you sign anything, ask yourself: Am I solving a capital problem or creating a control problem?
Because once you trade control for capital, you can't trade back.
Your business. Your legacy. Your choice.
But make it with your eyes wide open.
In Buckshot Roulette, I feel the pressure build as the round drags on longer than expected. Endurance becomes part of the challenge.