Investment business

The purpose of the investment business is to preserve and increase capital.

Investment business consists in the fact that an economic entity invests temporarily free funds in promising investment instruments.

Advantages and disadvantages

Investment business is an attractive area of activity with the following advantages:

• An opportunity to start working with a small start-up capital. A businessman independently determines the amount of investments, guided by the rule that you need to invest the amount that he is not afraid of losing.
• A chance to implement the creative ideas of an entrepreneur, to influence the work of the chosen organization.
• Possibility to choose between various objects for investment and numerous business projects.
• Focus on the future. As the investment portfolio grows and diversifies, the passive income of the investor grows, which can provide a comfortable existence for many years.
• Unlimited profits. The amount of the investor's income is unlimited, it all depends on how well the object is chosen for investment.

Disadvantages of investment business:

• Minimal investments bring insignificant income. To receive tangible dividends, you need to have a large initial capital.
• An ordinary investor cannot influence the development of the company. The management of the organization determines the range of products, production and personnel policy independently.

Types of business investments

All forms of business investment can be divided into four qualification criteria:

By Right of Ownership

If an investor has significant capital, he can invest in his own business. This path requires certain knowledge, personal effort and time. The advantages of this choice include the possibility of self-realization and maximum profit. Investments in someone else's business do not require personal participation in its development and are associated with less risk for the investor. The disadvantages are the difficulty in choosing a project, the inability to influence the development of the company.

In terms of funding

Full funding assumes that all funds are contributed by one participant. This model is most often used when starting your own business. Partial financing involves the authorized capital of the organization, formed from the funds of a large number of shareholders, each of whom owns his own company.

By Financing Stage

The investment business provides for different types of investments, which depend on the stage of development of the company. The investee may be at the stage of development or may be a functioning organization. In the first case, the potential profit and risks are higher.

By the way the income is generated

Most often, the investment business involves passive income: the investor receives passive income after investments without direct participation in the project. Less common is the active form: investments are directed to the development of their own business, and then the investor becomes the head of the company.