
Ask HN: Refunding an investor? - ughboringnote
Hi, I raised some money on a convertible debt note about a year ago. We recently pivoted and one investor asked if they could have their money back. The note has not expired. Can I give the investor back their money without refunding the others? Should I give it back? We can afford to but would rather note... Thanks
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tlb
It's usually a good deal to buy out an investor that isn't on board with your
current direction. Otherwise, they'll be a nuisance going forward. Better to
make room on your cap table for new investors that are on board and will want
to put in money in later rounds.

You should get specific legal advice about refunding one investor but not the
others depending on your documents and situation. You should tell the other
investors what's going on.

And remember not to take money from this guy next time. Fickle investors suck.

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akg_67
Ask your other investors and BoD. If they are onboard refunding one investor,
go ahead.

It is a convertible note so there most probably a conversion and payback
timeline in the note. If BoD/other investors decline to agree to refund now,
let the investor know his options from the convertible note agreement.

Good Communication is the key to managing that investor going forward.

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rajacombinator
If they’re friends and family, figure out a way to do it and avoid strife.
Otherwise tell them to put on their big boy pants and suck it up.

