Is it good for a company to return investors money if the business is not profitable?

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JASON LEMKIN

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.

More here: Don’t Worry About Losing All Your Investors’ Money

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Published on August 29, 2016
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