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Yash Jain
•

Sparrow Capital • 1y

Hi everyone! I’m Yash, General Partner of Sparrow Capital, investing in Indian startups. Here to answer all your questions regarding startups, venture capital, funding, current market and anything else that you might have. Please put down your qu

Rishi M.

Technical Artist • 1y

If I raise a seed round of let's say x amount and the buisness collapses after some time. What happens to the company? As a founder do I need to pay back to the investors who invested in me even after the startup failed? Is there any legal boundaries on this?

2 Replies

Replies (2)

Yash Jain
•

Sparrow Capital • 1y

Nope. No liability

Faraaz Naizer

Conquering goals one... • 1y

When VCs or angels wish to invest in a business, it is converted into a Private limited company and all members of a private limited company are only liable to the extent of the capital they have invested. So even if the business collapses the founders will not be liable to pay back the investors. But it won't be a cake walk either, there would be pressure from them to either raise more capital / other solutions.

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