RIP, startups.

“I thought this was gonna be like a real funeral,” Betabeat’s date complained. Her confusion was understandable. The invitation for Friday night’s Startup Funeral--a sort of reverse launch party for failed startups--instructed us stop by the “New Work City Funeral Home.” So we were a little surprised, upon entering the dim second-story loft off Canal Street, to find a DJ spinning hip-hop as guests milled about the Chinatown coworking space in business casual--save for a veiled woman and a dude in devil's horns.

We didn't spot any condolence casseroles, but canapés sat on trays next to bowls of punch and pink paper lamps hung from the ceiling. On the Western window, a large screen bore the Wifi password.

Precisely one hour into the event, a bagpiper's procession cut the networking short, indicating that it was time for the mourning to begin. Host Kevin Galligan, an Android developer in a priest’s toque, reassured us we weren’t the only ones befuddled by the party's conceit.

“At first everyone kind of got it,” he explained. But the notion of celebrating failure--something we hear Silicon Valley types are a little more comfortable with--became difficult for locals to process. "It turned into, ‘We’re gonna have lessons, right? We’re gonna learn what they did wrong and we’re gonna avoid that next time?’ Or it’s like, ‘Oh you’re gonna make fun of everybody? That’ll be hilarious!’ Then it was people that were upset: ‘Oh, it’s a funeral? It’s so morbid! Why would you do that?’ Eventually I just stopped explaining it,” Mr. Galligan admitted.

After some more funereal piping, he passed the mic to his cohost, web designer Leo Newball, who showed off the miniature urns (filled with hard candy) each presenter would receive. "Father" Newball apologized that Favorly, which describes itself as "Kickstarter for human capital," wouldn't be on the speakers list due to a fortunate turn of events. Just two hours before the party, the company had been resuscitated, narrowly avoiding the deadpool.

The first presenter, iOS developer Brian Papa, took the floor in front of a projected mock tombstone that read, “Addieu 3/2011-8/2011: There was an app for that.”

Mr. Papa described his now defunct app as “a quick and easy way to connect with people that you meet on Facebook, Foursquare and Twitter all in one shot.” Addieu may have won third-place for best app at South by Southwest in 2011, but it was still “very awkward to use in real-life situations.” Users would have to get their friends to download Addieu, “and it was a tough word to spell because it’s not even a real word. It’s a French word that we added a letter to.” But the biggest problem, Mr. Papa concluded, might have been that “we were trying to solve a problem that nobody really had.” Soon enough, he bid adieu to Addieu.

Dan Tashman, cofounder of Skip Trace Design and former star of Betabeat's web series "The Pitch," was more somber as he described how his app Get-a-Game grew out of—and was held back by—his passion for pick-up sports. “I was trying to build this portal for users,” Mr. Tashman recalled, “but in the end it didn’t really serve the people who were going to be monetizing the business, which is the sports service providers, the gyms, the trainers.”

As a “single cofounder,” Mr. Tashman revealed, recruiting a team from around the world led to terrible hours. The end came, however, when he had a hard time with the ever-popular pivot, a Startupland staple: “They always tell you to do what you’re passionate about, but then they expect you to have this flexibility where if it doesn’t catch, you should pivot quickly. And that’s something that I had a lot of trouble with. Because at the end of the day, I had a specific goal in mind and anything else was really not what I wanted to do with the rest of my life.”

Last up was Chris Siragusa, former CTO of Kozmo.com, the free online delivery service whose orange-cloaked bike messengers once ruled the streets of New York. He jokingly described the company, now a punchline for dotcom era excess, as “the most ridiculous company ever to try to do something.”

“In a year and a half we went from six people working in a basement to three hundred people working in five floors downtown,” Mr. Siragusa told an astonished crowd. “We went from one warehouse in lower Manhattan to 25 warehouses in 11 cities around the country. We went from just videotapes to DVDs to books, movies, magazines and prepared burritos. And at the end of the day I think we raised somewhere close to $280 million." The only problem? "We were losing money on every order.”

And who could forget Kozmo's notorious Oscars party in advance of the company's March 2000 IPO? Not Mr. Siragusa. "Liquor was flowing much more than today," he recalled. "There was our CEO standing on a grand piano giving this crazy speech about all the stuff that we’re gonna do in the future. Everyone left the party just counting the value of all their shares in their head. The market crashed two weeks later." As investors fled, Kozmo shed employees and closed markets, eventually folding in April 2001. The best parts of the business model were resurrected, however, when Mr. Siragusa went on to found the similar, but smaller, Maxdelivery.com.

“We’ve been in business for seven years," he announced with a smile, "still growing, and having a great time.” Sans grand piano, we assume.

(Photo: Startupfuneral.co)

Startup parties tend to focus on the positive. Launches, app releases and acquisitions, oh my! It's a freaking party, after all. But the flip side also deserves to be commemorated. With booze. So goes the logic behind Startup Funeral. "Join us as we pay respects to our dearly departed startups who have left us for the deadpool," says the site, with a link to an event on September 21st that promises to do just that.

The wickedly clever idea was masterminded by Android developer Kevin Galligan, who then teamed up with four of his fellow entrepreneurs out of New Work City, a co-working space in Chinatown: Leo Newball, Jr., Jason Kende, Valerie Lisyansky and Jason Nadaf. "Work time: 45 minutes; Discussion Time: 2 months+," Mr. Newball told Betabeat by Gchat when we asked how it took them to build the site.

Founders representing the deceased startups will have a chance to speak for five minutes about whatever they want--lessons learned, plugging their new venture--but the aim is to have a good time. "So the idea [for] Startup Funeral started as a Viking funeral--drinking with a burning effigy as they would in the grand old times when the Vikings ruled the sea. Then the idea morphed. Why not an Irish funeral? Why not a marching band?" Mr. Newball explained. "We want to be clear it's primarily a party; the learning experience is way down the list."

"An effigy falls in the middle of that," he added, noting "potential fire permits." If all goes well, the group plans on hosting more funerals under different themes. For the kickoff in September, they're toying with the idea of featuring bagpipe players. "If you happen to know one, that would be awesome!" Mr. Newball said.

We weren't sure how seriously to take the concept. After all, the companies peeking out of the coffin on Startup Funeral's homepage--Hashable and Digg--have their share of detractors. Were they (gently) mocking these companies' demise or do the creators ascribe to Startupland's "fail fast," school of thought? "This is a stage of life we're recognizing. And the message is failure is par for the course," he said. "So, self-mocking, yes, but in good humor. Each startup has a 'launch party,' funny how none of them have the opposite when things don't go well."

Sounds kinda heavy for a party theme. "That's what booze is for," Mr. Newball explained. "Everyone deals with grief in different ways."

"Plus," he added, "We're trying to derail Startup Weekend." Did we detect a beef, after all the build-a-business weekend event was being hosted at AlleyNYC, a new rival co-working space in Midtown? "No, not really," he said with a laugh, "But I'm sure there will be a few people who may be interested who start Startup Weekend Saturday with shades on."

The group is still putting together a guest list of speakers. "We are reaching out to Hashable ASAP. We consider Digg in zombie mode, so they aren't quite ready yet for a eulogy, but we will have some 'honorable mentions' throughout the evening. Consider it a compliment." As a group of freelancers, entrepreneurs and founders, Mr. Newball said every one of Startup Funeral's creators has sympathy for the dead. "We all have experience with failures ... and each one rough in varying degrees."

The experience of getting this idea off the ground has been not unlike a building a startup. "Kevin [Galligan] keeps reminding all of us (even while writing this), 'Just get it launched and we'll figure the rest later!'" Here's hoping we don't have to go to the Funeral's funeral.