5 Key Differences Between Business Partners and Investors

When you are looking for financing for your business, understanding the difference between partners and investors is very important. Actually, both can help you raise the necessary fund that you need to start and operate your business. However, they play very different roles in the business.

• An investor will basically put money into a business in hopes of getting some returns on investment (ROI). On the other hand, business partners co-own a business as they raise the capital for the business per agreed terms.


• Investors expect returns on investment regardless of how the business is doing. Business partners share losses and profits, If the business experience any problem, they are all answerable though they may own equal or different share.


• Investors do not participate in the day-to-day running of the business, although the business owner keeps them informed on the business performance.

Bonus Facts

• If you want to control your business, make sure to own 51% or more of it’s shares, as such your partners can not easily outvote you on a serious decision.


• Some investors may also be partners oh yes! for instance, if an angel investor may ask for a share of the company instead of asking for a ROI investment. This is based on how he perceives the business potential and also his own interest in the business.

Word Hint
Angel Investor : An Individual who provides funding to one or more start-up companies. The individual is usually wealthy or have a personal interest in the success of the business. Investments like this are distinguished by high levels of risk and a potentially large return on investment.

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