Having been through shutting down my previous startup just a few months ago I can say that my experience mirrors this quite closely. Its scary and stressful at the time, but at the end of the day, nothing bad happened and nobody ridiculed us. In fact, everybody (including our investors - some of which are involved with us again) was quite positive and everybody sees it as a positive learning experience. And being able to say that we're on our second startup has been beneficial too.