If investors haven't received their target return on investment by the maturity date, one of two things will happen:
1. Balloon Payment
In this scenario, the business would pay their investors the amount remaining towards the target return on investment. For example, if you invest $100 in a business that is offering a target return on investment of 50% and you have only received $125 dollars of shared revenue by the maturity date, the business may provide you with a balloon payment of $25.
2. Remain in Default
If the business does not provide a balloon payment, they will remain in default. Interest will accrue and compound on the amount owed. Investors (or a representative they agree upon) could pursue legal action to force repayment or bankruptcy. Mainvest does not pursue legal action on behalf of investors. Investing in private businesses involves risk. It is possible that you would not receive payments from the business in this scenario.
This information is a summary of how most of the investor agreements on Mainvest are structured. This summary is not comprehensive. Review the investor agreement available on each business's listing page for the specific information pertaining to that investment opportunity.