Investors are an organisation or individuals that give out money of capital to start a business.
It all starts from a business idea which will be brought up by an entrepreneur. The entrepreneur might be short of start up capital or his business idea will be of best attraction to the organisations or individuals with a lot of money or capital to give out, then the business idea owner will probably get some capital to put his or her idea into practice. This will help make or generate some profits which he or she will on some term have to share with the people who will have supplied with capital.
A business investment specifically refers to accounting assets that are purchased in the hope of making money on their own, as opposed to something like a delivery car for a restaurant. The difference is that a delivery car will help make the business more profitable, but the restaurateur is unlikely to be paid back for the vehicle itself.
Investors help business in provides start-up funds that are needed to procure equipment and hire employees.
The business investors also educate the new companies about business and all its related aspects. The start-up companies also get a list of all the business contacts and referrals that have been collected over the years. The level of commitment of the business investors is supreme. All efforts are taken to create a sustainable, profitable venture.
Before they invest in business investors look into many things for example the profitability of the business, risks aligned with his investment that is the risks that can be faced by the business he or she want to invest in and also the legitimacy of the business.
Investors are of most help to small businesses mostly in offering them start up capital and assisting them in all the aspects of the businesses that need finance. In conclusion investors are the finance providers to businesses that are not financial stable.