So you’ve bootstrapped your business, taken out a loan from the bank, and convinced some investors to come on board. Congratulations! But what happens if things don’t go as planned and you end up failing your investors? Here’s a look at some of the potential consequences, as per Peter DeCaprio.
Peter DeCaprio Explains What Happens If You End Up Failing Your Investors
No one likes to think about what could happen if their business venture fails, but, according to Peter DeCaprio, it’s important to be prepared for the worst. If you end up failing your business investors, there are a few things that could happen.
First, you will likely have to repay any money that they invested in your company. This can be a difficult thing to do, especially if you don’t have the funds available right away. You may need to take out loans or sell assets in order to come up with the money.
Second, your business investors may choose to sue you. This could result in a judgment against you and potentially force you into bankruptcy. Even if they don’t win their lawsuit, the legal fees can be very costly.
Third, your business investors may no longer want to work with you. This can make it difficult to raise money in the future and could damage your reputation.
Finally, if you have personal guarantees from your business investors, they may come after your personal assets. This includes things like your home, car, or savings account.
What Are Your Rights If You Cannot Pay Back An Investor?
It can be extremely difficult to pay back an investor after your business has failed. You may feel like you have no options and that you’re stuck with this debt forever. However, there are certain rights you have as a debtor that can help you negotiate a repayment plan or even get the debt forgiven entirely.
Your first right, as per Peter DeCaprio, is to request a hardship payment plan from the creditor. This type of plan allows you to make smaller payments over a longer period of time, making it easier to afford the monthly payments. The creditor may be willing to work with you on this if they believe it’s in their best interests to do so.
Your second right is to file for bankruptcy. This will discharge most, if not all, of your unsecured debts, including the debt to the investor. However, it’s important to note that this is the last resort option and should only be considered if you absolutely cannot afford to repay the debt.
Your third right is to negotiate with the creditor directly. This can be a difficult process, but it may be worth it if you’re able to come to an agreement on a repayment plan that works for both parties. If you’re not sure where to start, there are plenty of resources available online or through your local library that can help you with this process.
Remember, you have rights as a debtor, and there are options available to you even if you cannot pay back an investor after your business has failed. Don’t give up hope, and be sure to explore all of your options before making a decision.
Peter DeCaprio’s Concluding Thoughts
While it’s not a pleasant topic to think about, it’s important to be prepared for the worst, says Peter DeCaprio. If you fail your business investors, there could be serious consequences. Be sure to consult with an attorney if you have any questions about what could happen.