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If your startup is really hot, investors probably won’t object to having your $100k treated as a loan. However, most investors don’t like the idea of their capital going to payback founder loans. After all, they are investing in the company and want 100% of their capital to be put into growing the business.
With this in mind, it may be in your best interest to consider your investment as a non-reimbursable expense. That’s what investors would prefer.
That said, you did invest the money in the startup, so don’t you have a right to preferred shares? Well, most investors want you to own common shares, not preferred shares. This is because they want to get their money out before you start making a profit.
Ramneek Gupta is the Managing Director of Citi Ventures. His focus is primarily on identifying opportunities and investment themes in an increasingly connected world and partnering with leading entrepreneurs as they change the way we interact, consume, purchase and otherwise engage with people, content and businesses around us.
Ramneek brings over a decade of investing and startup experience to the Citi Ventures team. Prior to joining Citi, he was a Partner at Battery Ventures where he helped develop the Online to Offline (O2O) Commerce theme and worked closely with portfolio companies including Groupon. While at Battery, Ramneek also led the India investment efforts for the firm and helped build out an investment team and portfolio in India. He started his professional career as a design engineer at PMC Sierra and also worked on the hardware design team at TiVo.
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