When an angel investor (or any investor) invests in a failed business... do they expect that money back or not?

I think that would depend on the terms of the agreement. But generally, an investor is buying a share of the company, and if the company is worth nothing, the share of the company is worth nothing. I suppose the investor could provide a loan based on some collateral you have, but again, you’d have to agree to that in the first place.

Anyway, most people put some of their own money into the business, but it really is the business that is borrowing or being bought, assuming you have set it up properly. If you do not separate yourself from the business, then they can come after your assets. I think it depends on the articles of incorporation.

An investor puts his money where he expects the best return. If he believes the business will succeed, he will invest, but investors are always taking a chance of zero return as well.

No. Investing is like gambling. But that does not mean they will be happy about it.

My son and i were just talking about this – he thought that “angel investors” do not look to get their money out; I wonder why they would invest then?

@janbb The term Angel investor only means they are private parties, not investment groups or bankers. The still expect to see a return on their investment.

@YARNLADY You may be right; it makes sense. My son explained it to me as someone who invests in your business with no strings attached; is that incorrect?

@janbb An angel with no strings attached would not be an investor, they would be more of a philanthropist.