Munchery is still in debt to a number of bakers and chefs in San Francisco, including Dandelion Chocolate, Crumble & Whisk, Hodo Soy and Petit Pot. The businesses are collectively owed over $50,000, and the owners are taking to social media to try to raise awareness about their plight.

On Monday, Estrada held a protest bake sale outside the San Francisco offices of Sherpa Capital, one of the VC firms that invested in Munchery. She said she has spoken to representatives of the San Francisco mayor's office and the state Department of Justice, but sees little recourse. She said she and other small businesses are bearing the financial consequences of a failed venture capital experiment.

This whole scenario does not surprise Mara Zepeda, an entrepreneur who helped begin Zebras Unite. The group advocates for more inclusive tech companies that focus on sustainability and responsibility, rather than the hyperfast growth and profit demanded by venture capital.

“Criticizing venture capital for being too high-growth is like criticizing fire for being hot,” Zepeda said.

Venture capital investment in the U.S. is at an all-time high, surpassing the 2000s dot-com levels for the first time. Zepeda said VC money puts pressure on companies to expand faster than may be wise in the hopes that someone will buy them up or provide more cash before the money runs out.

Aniyia Williams, an entrepreneur who lives in San Francisco’s Bayview neighborhood not far from the Three Babes Bakeshop, said she felt that pressure. Williams started a venture-backed company, Tinsel, which made ornamental headphones.

“You’re trying to just move at the speed of light," Williams said. "It always feels like, OK, you’re just that much closer to finding that next investor who’s going to be the one who writes that check that’s going to save you.”

At one point, her company was pushed to the brink, but Williams said she was able to pay off all her debts — not because anyone forced her to, but because she made a personal decision to prioritize it. Tinsel is now in a bit of stasis mode while Williams tries to sort out her next move.

Minimizing damage to other businesses isn't such a high priority for many venture-backed companies Williams said. “Fundraising becomes the business model, and these partners you’ve had along the way can get caught in the wake.”

Getting caught in the wake of Munchery's failure is especially damaging for small companies like Three Babes Bakeshop. Owner Estrada said she pays herself only $30,000 a year, and her margin for survival is razor-thin.

Estrada said some of her customers suggested she run a GoFundMe campaign to recoup her losses, but she doesn’t want the burden to fall on friends and customers. “What we want is for the venture capitalists, the investors and board members to take responsibility and write a check for the money that we’re owed,” she said.

Losing $20,000 means Estrada won’t be able to expand this year like she had planned, and she’s going to have to scrape to continue offering health care and benefits to her employees.

Munchery's former CEO Beriker says he’s "personally working on potential solutions," but by law the company must pay banks and employees before vendors like Estrada.

"I realize just how hard this is for local businesses," Beriker wrote in an email. "We have so appreciated our partners, large and small, and deeply regret the impact that our lack of funding and sudden decision to shut down had on their businesses and families."