diff --git a/src/bin/vibebox.rs b/src/bin/vibebox.rs
index 51bdadf..000f817 100644
--- a/src/bin/vibebox.rs
+++ b/src/bin/vibebox.rs
@@ -120,9 +120,15 @@ fn main() -> Result<()> {
     tracing::debug!(auto_shutdown_ms, "auto shutdown config");
     let manager_conn =
         vm_manager::ensure_manager(&raw_args, auto_shutdown_ms, config_override.as_deref())
-            .map_err(|err| color_eyre::eyre::eyre!(err.to_string()))?;
+            .map_err(|err| {
+                tracing::error!(error = %err, "failed to ensure vm manager");
+                color_eyre::eyre::eyre!(err.to_string())
+            })?;
 
-    instance::run_with_ssh(manager_conn).map_err(|err| color_eyre::eyre::eyre!(err.to_string()))?;
+    instance::run_with_ssh(manager_conn).map_err(|err| {
+        tracing::error!(error = %err, "failed to ensure vm manager");
+        color_eyre::eyre::eyre!(err.to_string())
+    })?;
 
     tracing::info!("See you again — keep vibecoding (no SEVs, only vibes) 😈");
 
diff --git a/src/instance.rs b/src/instance.rs
index e160c3a..f7b77e6 100644
--- a/src/instance.rs
+++ b/src/instance.rs
@@ -266,6 +266,11 @@ fn wait_for_vm_ipv4(
                 Ok(status) => {
                     status_missing = false;
                     let status = status.trim().to_string();
+                    if status.starts_with("error:") {
+                        let _ = fs::remove_file(&status_path);
+                        let message = status.trim_start_matches("error:").trim().to_string();
+                        return Err(message.into());
+                    }
                     if !status.is_empty() && last_status.as_deref() != Some(status.as_str()) {
                         tracing::info!("[background]: {}", status);
                         last_status = Some(status);
diff --git a/src/vm_manager.rs b/src/vm_manager.rs
index 540b922..ae65bdf 100644
--- a/src/vm_manager.rs
+++ b/src/vm_manager.rs
@@ -17,6 +17,7 @@ use std::{
 
 use crate::{
     config::CONFIG_PATH_ENV,
+    instance::STATUS_FILE_NAME,
     instance::VM_ROOT_LOG_NAME,
     instance::{
         DEFAULT_SSH_USER, InstanceConfig, build_ssh_login_actions, ensure_instance_dir,
@@ -765,6 +766,10 @@ fn run_manager_with(
     );
     tracing::info!("vm manager vm run completed");
     let vm_err = vm_result.err().map(|e| e.to_string());
+    if let Some(err) = &vm_err {
+        let status_path = instance_dir.join(STATUS_FILE_NAME);
+        let _ = fs::write(&status_path, format!("error: {err}"));
+    }
     let _ = event_tx.send(ManagerEvent::VmExited(vm_err.clone()));
     let event_loop_result: Result<(), String> = event_loop_handle
         .join()