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Question
If a venture capitalist or Angel Investor invests money into my company how are they paid?
Are they paid Monthly like you would pay back a loan? What if your business fails and you end up not being profitable. Are you still supposed to pay back the investor somehow?
5 months ago - 2 answers
Best Answer
Chosen by Asker
Generally the VC or Angel Investor receives a number or % of shares/stock in the company and is able to cash out when the company goes public or is aquired by another company. It will usually negotiate a seat on the board of directors into the agreement as well so that it has some influence on the business decisions and the direction of the company. So it is different than a loan whereas a loan must be paid back over a period of time. The other difference is the company will be sold to another company or intend to go public in a period of time, generally within 5-7 years.
Source(s)
how stuff works
by ♥ Ruby ♥
5 months ago
Asker's Rating: 
Other Answers
They normally get certain percentage of shares within that company. Any profits will goto them as long as they owns shares. Even if it doesn't make any money, if the company goes to public, the value of that is much higher in market valuation compared to what VC might have paid.
by Siva K- 5 months ago