What happens if a founder fails a startup? Should he give back the money to investors?

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JASON LEMKIN

Ask your investors.

If it’s truly hopeless and you’ve given up, and there is money left … most / all investors will want their money back.

But if there’s still some chance, and/or you have a great team that wants to “pivot” and try something new … some investors will prefer you do that.

If the investment is a small amount for your VCs/angels/etc. as a % of their net worth / assets, they may just prefer to roll the dice again if there’s some chance the 2.0 version of your start-up could work.

After all, the downside is limited, and the upside in limitless 🙂

But if it’s a large investment for anyone, especially individuals … they may want whatever money they can get back … back.

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Published on April 5, 2017
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