What happens if my company loses its investment?

What happens if my company loses its investment?Getting business funding may be a drawn-out and difficult process, whether you’re a start-up or an established company looking to expand.

Therefore, if an investor withdraws unexpectedly, it might seriously affect your goals and perhaps prompt you to contemplate shutting down.

However, there are specific steps you can take to deal with an investor who requests a withdrawal. When you eventually learn that they are leaving, it can make you wonder if your plans will ever materialise.

This scenario might begin with a lack of response to your emails and calls, which is already troubling.

What should you do in this situation, and are there any frequent causes for investors to sell their shares in a company.

Why do investors pull out?

These are the reasons why an investor will pull out of a business:

Market changes

Investors who depend on a timetable to earn a return and who may have precise plans for using the money on their investment may be alarmed by a market collapse. A market slump can also render a business model unprofitable, which might cause investors to rethink their stake, even if it just has a short-term effect.

Lack of liquidity

To make investments, investors rely on their own liquidity. They might be left with no choice but to exit if they mistimed an investment or couldn’t get the money they needed.

Friction between yourself or your business partners and the investor

There might have been a conflict with you or your business partners if the investor manages the company; it could have been about a financial or operational issue. They might believe that selling their stock in the company is the only option left if the dispute cannot be addressed.

What can you do when an investor pulls out?

When faced with an investor withdrawal, it can indeed be a challenging situation for a business. Here are some steps you can take to deal with the situation effectively:

  1. Assess the impact: Start by evaluating the financial impact of the investor’s withdrawal. Understand the amount of funding that will be lost and how it will affect your business operations, growth plans, and ability to achieve your goals.
  2. Communicate with the investor: Reach out to the investor who is withdrawing and try to understand their reasons for doing so. Maintaining open and honest communication can help you gain insights into their decision and potentially explore any possible alternatives.
  3. Review your financials and adjust your strategy: Revisit your business plan, financial projections, and goals. Identify areas where you can cut costs or optimize operations to minimize the impact of the lost investment. Consider adapting your strategy to align with the current financial situation.
  4. Inform stakeholders: Share the news with your team, employees, and other stakeholders involved in the business. Being transparent about the situation can foster trust and allow others to provide support or contribute ideas to overcome the challenge.
  5. Engage existing investors: Reach out to your other investors and reassure them of your commitment to the business. Provide them with a clear plan on how you intend to move forward and address the gap left by the withdrawing investor. Explore the possibility of securing additional investment from them or renegotiating terms to fill the funding void.
  6. Seek new investment opportunities: Actively seek new investors who may be interested in your business. Leverage your network, attend industry events, pitch to potential investors, or consider approaching venture capital firms, angel investors, or crowdfunding platforms. Prepare a compelling pitch highlighting your business potential and addressing the investor’s concerns regarding the previous withdrawal.
  7. Explore alternative funding sources: Look into alternative funding options, such as business loans, lines of credit, government grants, or strategic partnerships. These sources can help bridge the funding gap while you work on securing long-term investment.
  8. Reassess your business model: Consider if there are any adjustments you can make to your business model to enhance its attractiveness to investors. Evaluate your value proposition, target market, revenue streams, and competitive advantage to ensure they are compelling and aligned with current market trends.
  9. Stay focused and persevere: Dealing with investor withdrawals can be disheartening, but it’s important to stay focused and persevere. Adapt to the situation, remain resilient, and continue working towards your goals. Seek support from mentors, industry peers, or business advisors who can provide guidance during this challenging time.

Remember that investor withdrawals can happen for various reasons, such as market changes, liquidity constraints, or conflicts. By taking proactive steps, maintaining open communication, and exploring new opportunities, you can navigate through this setback and position your business for future growth.

Frequently asked questions

What happens when investors pull out?

When investors pull out it means selling your shares or redeeming your investment before its maturity date. It's important to remember that investments can be volatile, so the value can go up and down. When you pull out of an investment, you may not get back the same amount that you originally invested.

Can investors withdraw their investment?

Yes, an investor can withdraw their investment, they should offer a withdrawal plan allows a shareholder to withdraw money from a mutual fund or other investment account at predetermined intervals. Often, this type of plan is used to fund expenses during retirement. However, it may be used for other purposes as well.


In conclusion, dealing with an unexpected investor withdrawal can be a daunting challenge for any business. However, by taking proactive steps and implementing a strategic approach, it is possible to mitigate the impact and find alternative solutions to secure funding. Key actions include minimising expenses, keeping your team informed and engaged, reaching out to other investors for support, and actively seeking new investment opportunities.

Adapting your business strategy, exploring alternative funding sources, and maintaining a resilient mindset are crucial in navigating through this setback. Remember, setbacks are a natural part of the business journey, and with perseverance and a focused approach, you can overcome these obstacles and continue working towards achieving your goals.

By leveraging the support of stakeholders, remaining adaptable, and capitalising on emerging opportunities, you can position your business for long-term success, even in the face of unexpected investor withdrawals.

If you are worried that your business may not survive after an investor had withdrawn their investment please make contact with out of our team today, via the number above or the online enquiry form.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.