The modern world is simply inconceivable without a full commodity-money turnover. It goes without saying that any material relationship should be governed by certain rules and people. Therefore, in this article we will learn in detail about who investors are, what is their role in international financial relations and the impact on the economic development of various enterprises.
Definition
Immediately, we note that today the global trend is such that not a single promising project will receive proper development without the involvement of certain financial figures.
So who are investors? According to the accepted terminology, these are individuals (both physical and legal) who invest their own money in various projects with one single goal - to get the maximum profit for themselves.
Empowerment
Attracting investors gives a person a chance to raise his business to a new, higher level. In addition, in order to better understand who the investors are, it should be borne in mind that the money allocated by them is most often used to expand, for example, production capacities, modernize technologies and equipment, train staff, and conduct research and development activities.
Sources of Investment
You can get money today for the scheduled tasks:
- at a banking institution;
- in venture capital fund;
- from a private investor.
We will consider each of these points in detail.
First of all, we note that any bank is a depository of a large amount of money, but this does not mean at all that its owner will be scattered by them in all directions. It is important to understand that bankers in their investments strive to avoid risk as much as possible. To this end, they present very stringent requirements to their borrowers.
Absolutely all banks act as investors only under the condition of a stable financial situation for a company trying to borrow money. Often, a banking institution requires a pledge or repay a loan with a certain interest. At the same time, bankers are closely studying the documentation, and if there is even the slightest doubt about the solvency of the client, then the issuance of money will be refused.
Venture capital funds stand apart among investors . It is their easiest way to attract to invest money in innovative projects.
Private investment in turn possible only when a specific person sees his personal interest in a particular activity and understands that thanks to it, the invested money will return profitably. As a matter of fact, each such investor is selected individually depending on the direction of the business. At the same time, the client will be required to provide either a business plan or technical and economic calculations, on the basis of which the rationality of further cooperation between potential partners will be determined. But in any case, private investment getting is much easier than negotiating with a bank or venture fund.
Stocks and bods market
This segment of the global money market is also saturated with various actors. We will note such a character as a financial investor. The main task of this individual or legal entity is to earn as much as possible, using your investment portfolio and clearly thought out your own strategy. Let's get acquainted with the types of data contributors.
- Aggressive investor. They are driven by the desire to achieve maximum profit. Very often, he invests in new, completely unexplored projects that can bring fame and huge income in the future. Moreover, the risk is very high.
- Conservative investor. Its main purpose is to make a profit on the basis of calculated investments. He never pursues the maximum, but strives for the reliability and security of the contribution.
- Moderate investor. In his investment portfolio, there is always a balance between adventurism and logic. Very often, he acquires government securities, shares of well-known and very stable corporations and companies.
Profit sharing
Any business has its own nuances. In this regard, one should not think that the money allocated for the development of an enterprise or business is given just like that. All investing companies strive only to receive the highest possible dividends. Although there are examples when a borrower literally “pinches” money for interest payments. So, based on the S&P 500 list, such global giants as Berkshire Hathaway, Google and Apple are not too eager to share profits with their investors, and this despite the fact that they can not be called unprofitable. According to experts, if these companies turned to face their shareholders and began to pay a little more money than now, then the cost of shares of these titans of the market for new technologies would increase significantly.
Hope that thanks to this article it became clear to you who the investors are and why they exist.