A common question that all businessmen might think:
“If I pump in money, am I an investor or shareholder?”
Well, that depends on the context of course!
Before we dive further in, I hope that you have read what is a shareholder and how a shareholder is different from a director.
So, what is an investor? To get straight to the point, it would directly mean those people who pump money into a company right? That’s correct, and you might be wondering, isn’t that the same as a shareholder? Well, yes, that’s because:
‘All shareholders are investors, but not all investors are shareholders!’
What do I mean by that? Well, this is because investors can also invest in a company without gaining any shares. Instead, investors can in return get back the money they have lent to a company in the form of securities. So, an investor will remain only as an investor if they do not receive shares, but just bonds that can represent the loan.
Are you clear about the difference between an investor and a shareholder? While both are commonly mistaken as the same term but in reality, they are slightly different. After reading this article, you now have a slight advantage over other entrepreneurs! Give us a buzz if you want to know more about investments and shareholders to start your own business!