Write-off, Reconstruction, Liquidation or Bankruptcy
Worst case scenario occurs when the venture fails and the VC tries to minimize its losses.
The investment may be written off or forced into bankruptcy and liquidation.
If the VC continues to hold shares in the non-viable venture, the investment may fall under the category "living dead".
Reconstruction is another alternative. This may involve a complete take-over by the VC, dismissing of the entrepreneur and engaging a new management team in the hope of recovering all or part of the investment at a later point.
Worst case scenario occurs when the venture fails and the VC tries to minimize its losses.
The investment may be written off or forced into bankruptcy and liquidation.
If the VC continues to hold shares in the non-viable venture, the investment may fall under the category "living dead".
Reconstruction is another alternative. This may involve a complete take-over by the VC, dismissing of the entrepreneur and engaging a new management team in the hope of recovering all or part of the investment at a later point.