I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

Question

I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

In: 755

Answer 1

People who start up a company are rarely penalized when it goes broke. It is assumed that if they start up another company or go to work for someone else, their first bankruptcy has taught them what mistakes to avoid. That said I have read in numerous publications that entrepreneurs are allowed to go bankrupt three times before they get frozen out of venture capital.

It takes more than a great idea to build a company, it takes determination, skill, and most importantly luck.