On April 16, the acquisition deal for Disruption Corp. by 1776 was announced. Those pictured include 1776 co-founder Evan Burfield (far left); Virginia Gov. Terry McAuliffe (center, behind podium); 1776 co-founder Donna Harris (to right of McAuliffe); and Disruption Corp. founder Paul Singh (far right). DC Inno photo.

The acquisition deal between Disruption Corporation and 1776 came together because Crystal City-based Disruption was about to run out of money, an email to Disruption Corp. investors written by founder Paul Singh and obtained by DC Inno reveals. The email—sent April 14, the night before Disruption would be out of money—was the first time that some investors were notified of Disruption’s financial situation, Disruption Corp. investor Steve Bennet told DC Inno.

The authenticity of the email was independently confirmed by a second Disruption Corp. investor.

“Unfortunately, like many startups, we’ve run out of runway to execute. As of April 15, Disruption will be effectively out of cash. As a result, we had been preparing to wind down the operations, let the entire team go, return the Crystal Tech Fund to its sole LP, and return the space held by Disruption to the landlord,” the email reads.

Bennet, a Silicon Valley angel investor and frequent startup CFO, first published an excerpt of the email in a post on his blog.

Disruption Corp. incubated and invested in startups, and also developed software used by private investors; 1776 is a D.C.-based startup incubator and seed fund that’s known for running the annual Challenge Cup startup competition in sites around the world.

Singh’s email also shows that Disruption Corp. had an agreement in place to merge with 1776 prior to some investors being notified about his company’s financial situation.

“We understand this may be news to some of you,” Singh wrote in the email.

Here’ s the full email sent by Singh to some investors on April 14:

Thank you for your belief in me and the entire Disruption team. We had bold visions for how we were going to upend research and investment in the private market, and we wanted to make that vision a reality in Crystal City and the DC region. Unfortunately, like many startups, we’ve run out of runway to execute. As of April 15, Disruption will be effectively out of cash. As a result, we had been preparing to wind down the operations, let the entire team go, return the Crystal Tech Fund to its sole LP, and return the space held by Disruption to the landlord.

Now for some good news. 1776 has stepped in as a potential acquirer of Disruption Corporation’s assets and we’ve signed a term sheet together. This will be an all-stock transaction and the goal is to sign a binding asset purchase agreement by Thursday morning (when we’ll actually run out of cash). There will naturally be additional conditions to the closing and I’ll work closely with 1776 to satisfy those.

We understand this may be news to some of you, and you likely have many questions. Our objective is to be as transparent as possible with you so that you understand how this acquisition is being structured and what the future positive scenarios may be. Together with Donna Harris and Evan Burfield, the cofounders of 1776, we’ll be hosting a private briefing for you at 2pm tomorrow at 1776.

Singh, who is now a managing director at 1776, did not respond to a request for comment. In an email, 1776 co-founder Donna Harris said that “1776 acquired Disruption earlier this year because we believed in the Disruption vision and team, and the products they were creating have the potential to transform the way we help startups throughout the world.”

“One of our main goals at 1776 is to build great tools that help startups succeed and we are in a stronger position than ever to achieve that goal, specifically because we acquired Disruption’s products and team. When we announced the deal in April, we said that we believed this was a win-win situation, and that becomes increasingly clear with every passing day,” Harris said.

A representative of 1776 declined to specify whether the acquisition of Disruption Corp. has closed.