Re:Europe's Software Problem
by pelorat on Tuesday June 15, 2021 @11:42AM
(#27517097)
In some countries, if your startup fails you're legally obliged to pay back all money that was invested in it, and you won't be able to start another until you've done so.
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Re:Europe's Software Problem
by bennysomething on Tuesday June 15, 2021 @11:51AM
(#27517239)
Which countries? I've never heard of this, sounds insane!
... it's not the case in the US ? Wtf
Re:Europe's Software Problem
by pwthornton on Tuesday June 15, 2021 @11:50AM
(#27517231)
It's not a loan from a bank. It's an investment, and the nature of investments are that some fail.
It's pretty wild that founders would need to pay back this money. That would have a massive drag on any risk taking or innovation.
The entire point of venture capital and similar funding mechanisms is that in exchange for a potential massive return on investment, funders are willing to lose everything.
Loans from the bank if they are tied to you personally. A delaware c-corp has pretty good protections.
Which also means that banks would be very hesitant to giving them any loan.
Bank strategy is to avoid risk, while VC strategy is to take risks.
It depends on what kind of company you start. One with limited liability often requires more upfront investment.