Question about funding?

[hobokook]

So let's say your startup gets funded by angel investors or a VC.

But what happens if your business fails?

Do the investors sue you? Do you owe them any money? Will you go to jail lol?

Can someone please explain this to me.

Thanks
-Keith

 

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[mdturner]

They lose their money. That's why it's called investing, they believe in your product and you and so they back you up with the thought that you will be successful. However, given that you build up the right base, there's no reason your company should fail unless there's something wrong with it.

 

[fsna.hartley]

Did you borrowed? If yes, of course you owe them one.