The Financial Investor And The Strategic Investor - What Type Of Investor Will Support You And Your Online Business?
Within the not so distant past, there was little distinction between financial and strategic investors. Investors of all types sought to safeguard their own investment by taking over as many management functions as they could.

Additionally, investments were small-scale and shareholders few. A firm resembled a household and the quantity of people involved - in ownership and in management - was correspondingly limited. Men and women invested in industries they were familiar with first hand.

As markets grew, the scales of industrial production (and of service provision) widened. A single investor (or perhaps a small group of investors) could no longer cater to the needs even of a single firm.

As knowledge increased and specialization ensued - it was no longer feasible or possible to micro-manage a firm one invested in. In fact, separate businesses of money making and business management blossomed.

An investor was required to excel in obtaining high yields on his capital - not in industrial management or in marketing and advertising. A manager was required to manage, not to be capable of personally tackling the numerous and varying tasks of the business that he managed.

Thus, two classes of investors surfaced. One type supplied firms with capital. The other type supplied them with know-how, technology, management skills, advertising and marketing techniques, intellectual property, clientele as well as a vision, a sense of direction.

In many cases, the strategic investor also supplied the required funding. But, more and more, a separation was actually maintained. Venture capital and risk capital funds, for instance, are purely financial investors. So are investment banks as well as other financial institutions.

The financial investor symbolizes the past. Its money is the result of past - right and wrong - decisions. Its orientation is in short: an "exit strategy". This really is sought as soon as possible.

Exit strategies bring speedy profits. The stock exchange is a popular exit strategy. The financial investor is always on the lookout, looking for willing buyers for his stake.

The financial investor has little interest in the company's management. Ideally, his money buys for him not simply a good product and an excellent market, but additionally excellent management. But his interpretation of the rolls and functions of "good management" are extremely different to that supplied by the strategic investor.

If you're on the lookout for a financial investor, and you are on the verge of seeking bankruptcy services or corporate debt restructuring, make contact with a business consultant for assistance. The act of restructuring a company will be a lot easier for you when you have professional help.

The strategic investor, on the other hand, represents the real long term accumulator of value. Paradoxically, it truly is the strategic investor that has the greater influence on the value of a company's stocks.

The quality of management, the rate of the introduction of new goods, the success or failure of advertising and marketing strategies, the degree of consumer satisfaction, the education of the workforce - all depend on the strategic investor.

Indeed, slowly and gradually, the balance between financial investors and strategic investors is shifting in favor of the latter.

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