If the company is at Series C, but they’re not a homerun, they have no way to pay back their investors.
Furthermore, their valuation by definition was too high… so you have the same “dissappearing value” mentioned elsewhere, and your options as an employee are likely not worth that much. As an employee in such a company, you’re also at risk of being laid off, as VC funds were likely put into hiring in anticipation of VC scale growth.
I have already left the company so not worrying about layoffs at least. Is there any obligation to pay back investors for “lifestyle businesses” or can they can continue operating with investor money indefinitely?
If the company is at Series C, but they’re not a homerun, they have no way to pay back their investors.
Furthermore, their valuation by definition was too high… so you have the same “dissappearing value” mentioned elsewhere, and your options as an employee are likely not worth that much. As an employee in such a company, you’re also at risk of being laid off, as VC funds were likely put into hiring in anticipation of VC scale growth.
I have already left the company so not worrying about layoffs at least. Is there any obligation to pay back investors for “lifestyle businesses” or can they can continue operating with investor money indefinitely?
I’m not an expert on this but I believe the owners have a fiduciary duty to try to make the investors whole.