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In the U.S. , it ’s admit that most inauguration fail — and when that take place , VCs ( loosely ) bear their personnel casualty and move on . But that ’s not the case in China , where VCs are sample to claw back their investment in failed startups by pursuing the personal assets of their founder in tourist court , The Financial Times describe .
As China ’s economy sales booth , the country ’s VCs are apply repurchase clause written into funding condition that were antecedently rarely enforced , concord to the FT . This is resulting in some Chinese founders owing millions of dollars to their investors and ending up on debitor blacklists , blocking them from book hotel , taking planing machine , or leaving China .
The drift is raising concerns about China ’s startup ecosystem being irreparably harmed , since this powerfully discourage father from raise capital in the first space . China ’s startups are already contend amid a government tech crackdown and tense U.S.-China relations , TechCrunch has account .
