[jjb123]

This is inaccurate. In no way did people have to turn to their personal finances to help companies that their company invested in. That is like your banker, seeing your dire situation caused by a third party to you, and writing you a personal check… That is actually what happened across multiple situations I witnessed. Not saying these folks are saints but pretty unexpected to see.

[bzax]

Board members have personal liability for payroll in California.

[tomato_123]

This is incorrect. Payroll pierces the corporate veil.

[jacquesm]

Not necessarily for investors, unless it can be shown that they have incurred liability beyond their investment.

[snotrockets]

Many investors like to have a board seat, which makes them an officer of the company

[jacquesm]

True, but getting a board to be liable has a very high standard of proof. If not then there wouldn't be any boards, the compensation would not outweigh the risks.

[snotrockets]

Given the choice between bridging some cash (knowing that the full faith and credit of the US government backs the funds being bridged), or having the possibility of getting dragged into proceedings in the future, which at best would increase my liability insurance premiums, I'd pick the former.