If a business fails, the ability to recover your investment depends on the specific terms outlined in the Offering Document and the Promissory Note. Generally:
- No Further Revenue: In the event of business failure, no additional revenue is generated to fund repayments.
- Security, Guarantees, or Collateral: If the offering includes any security, guarantees, or collateral, these measures may be utilized to repay investors. The extent and coverage (e.g., principal or partial repayment) depend on the provisions outlined in the Offering Document and Promissory Note.
- Liquidation of Assets: If the business has assets, they may be liquidated during the dissolution process to repay debts, including amounts owed to investors. The order of repayment priority is specified in the Offering Document.
Investors are encouraged to carefully review the Offering Document for details about security, guarantees, or collateral associated with each specific offering, as these significantly impact the risk and recovery potential in the event of a business failure.
