Is it good for a company to return investors money if the business is not profitable?
I hope you don’t find yourself in this situation. But if you do … Just Ask.
Ask the investors. Or at least, ask the largest 1 or 2.
Some may want their money back. But if they believe in you, and think you have a shot at doing something with the money that’s left … they may want to roll the dice again.
If a $1b VC fund has invested $1m in you … that’s only 0.1% of the fund. They may want to let it ride in some cases. Or get back what’s left in others.
If an angel has invested 10% of his net worth in you, by contrast … he’ll almost certainly want to save what’s left of his investment.
Guard every $$ you raise as if it’s the last dollar ever. But don’t worry about losing it all if you are going for it and doing all the right, and ethical, things.