Comment by quizotic

One reason is when the investors own > 50%, control the board, and decide to recoup 10 cents on their dollar.

But I've known entrepreneurs who made the decision independently, feeling it was the right thing to do.

And it is the right thing to do if the company has no other prospects or the team is falling apart.

But even so, returning the balance just keeps some salt from the wound. It doesn't make anybody happy.