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I don't completely understand the logic. After all, if they shut down, the VCs won't get anything, either. So why not keep it running and reap at least little r

• paxys 7y ago
  Once you take the funding, you have to spend it all on expanding operations, new staff, marketing, promotions etc. If you then can't generate a profit, unless you raise more rounds the increased expenses are going to kill your business. So in this case the VCs cut their losses instead of giving them more money.
• stickupkid 7y ago
  Alternatively you should also cut your losses early.