Hypothetically speaking, a startup gets some rounds of investment from VCs, operates for a few years, and run out of runway. What do these final months look like? Do the investors try to get their money back?
Hypothetically speaking, a startup gets some rounds of investment from VCs, operates for a few years, and run out of runway. What do these final months look like? Do the investors try to get their money back?
There are absolutely lawsuits around startups where funds were believed to be misappropriated, but if the startup was responsible and just couldn’t become profitable through bad luck then that’s just part of the risk of investing and why investment firms do research on the companies they are interested in. The reason it would close down would be because the investor just doesn’t want to lose anything more.