[jforman]

There is no such thing as "withdrawing funding" in this context. The Series A is long closed and Bessemer is deeply entwined with the company's governance.

The most severe move they could take would be to enforce whatever contractual mechanisms they have to block additional financing pending an independent investigation and replacement of responsible parties. Or they could directly force the matter if investors hold a majority Board vote.

[cobbzilla]

If the investors have a board and shareholder majority (which they may not), and really thought this was a terrible investment decision that they want to get out of, then they could vote to wind down the company immediately, redistributing the assets pro-rata (with possible liquidation preferences). This would be roughly the same as "withdrawing funding".

They could recoup a huge part of their investment before things get worse. But again, afaik this requires a shareholder majority, barring any strings/triggers on the investment terms that could be activated.