Differences In The Roles Of Investors And Partners

The successful development of any company depends on several parameters (investors, employees, human resources, among others) such as the national economic situation, the productivity of its employees, etc. The resources, both material and human acquired at the beginning, are not enough for the growth of its activities, because the more time goes by, the more resources it needs.

These resources are essentially provided by investors and partners. While this common goal is their point of convergence, in reality, their respective roles are their point of divergence. In this article, let’s highlight the roles of these actors with each of their characteristics.

The investors

Their roles in the company

investor

Investors are external people who bring capital to a company for the long term (at least 5 years), for example for the purchase of machines or patents. Thus, their main role is to inject money into a company. However, they can also contribute assets in kind such as real estate.

In return, the investors get a financial return. And this, when it is impossible for the company to finance itself, to borrow from a traditional bank or to benefit from the various subsidy programs or loans from the government.

Making an investment requires great vigilance on their part, as they expose themselves to great risks, namely the loss of their investment, in the event that the company’s activities degenerate. As a rule, before making an investment, investors require that the company is in good health and that its profitability is high enough.

To go further, investors can become a real support for the company’s manager, giving him the resources and advice necessary to optimize his sales and increase his turnover.

Moreover, depending on the size of their share, they can influence decision-making and voting at general meetings. And depending on their skills, they can suggest a restructuring of the company at all levels.

The different types of investments

There are 2 types of investors.

  • The individual investor who is a natural person, who invests independently in securities and assets.
  • The institutional investor who is a legal entity (company or organization). Their investment is larger than the previous one, which allows them to buy shares in publicly traded companies, pension funds, mutual funds and insurance company funds.

The Partners

Their roles in the company

investor

Partners are internal or external persons with whom a company associates or joins forces to accomplish a common action, by providing one or more contributions of various forms. They can be in-kind contributions, consulting contributions, financial contributions or technological contributions.

After the contributions have been made, the company and its partners carry out exchanges called “flows”. These are exchanges of information, capital, goods or services.

Each partner contracts with the company and maintains a relationship of trust with it. The roles differ according to each type of partner.

The different types of partners

Partners can also be natural persons or legal entities. They are classified into 6 types:

  • The State, local authorities, and various social organizations: they accompany the companies from their creation and throughout their development. They can subsidize them, put infrastructures at their disposal and save them in case of difficulty. In return, companies must respect the regulations in force and pay taxes.
  • Financial institutions: they can provide loans (in exchange for interest) and manage companies’ bank accounts (in exchange for commissions).
  • Suppliers of goods and services: these are companies that provide goods or services needed for the activities of other companies, in exchange for payments.
  • Partners or shareholders: when the company is created, they finance its capital, which gives them the right to acquire shares, to participate in decisions, and to receive remuneration from the company’s profits.
  • Customers: they buy the products or services offered by the company so that the latter can collect payments and realize its turnover.

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