A Matter of Business Ownership

Equity partners are quite different from other investors because they will actually take a minority or majority interest a business. Angel investors or venture capital investments usually don’t lead to business ownership. When the equity partners decide to put money into a project, the ownership endures until the return on investment is realized. In the case of project investments, a minority share of the business is usually the requirement of the equity partners.

On the other hand, when equity partners fund strategic operations, the business funding often leads to a majority ownership interest in the business. Since the investors are putting cash into the business with the expectation that the business operations made possible by the investment will create new profits and generate growth options, it really makes sense that the investors would take majority shares. The long term nature of strategic operations funding would naturally lead to investors wanting a long term say in the decision making process.

Equity partners will consider most financial needs and that includes startup funding. When preparing the business plan, it’s important to review all of the investor options. These include business loans and angel investors in addition to equity partners. Whether you are funding a project or strategic operations, a quality business plan is needed that targets the type of investor most likely to approve essential funding for business success.

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