Nope. Why did the investors allow the founders to take cash off the table? To align interests. Meaning, to swing for the fences instead of making safe, conserv

Nope. Why did the investors allow the founders to take cash off the table? To align interests. Meaning, to swing for the fences instead of making safe, conservative decisions and building a lifestyle business that would minimize the chance of shutting down. With the money off the table, the founders would have the freedom to try risky things, to manage the company such that the chance of failure was very high but the payoff for an unlikely success would be even higher. The company shutting down is exactly the outcome everyone expects to be a likely outcome. The investor has a portfolio of such investments, and does not care that the founders cashed in. The one hit they get will pay for all the founders they pay out. In fact, investors won't want to blacklist these founders. The message that would send is, "even if you get to take money off the table, you should still manage conservatively, because you will be screwed for life if you have to shut your company down." Investors do not want founders to be terrified of shutting down.