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Finance: Glossary

Unlike ordinary shareholders, all these investors have large stakes and can, and most often do, influence the running of companies in which they have invested...

india Updated: Mar 24, 2008 19:28 IST

Unlike ordinary shareholders, all these investors have large stakes and can, and most often do, influence the running of companies in which they have invested. There are different types, depending on when in the life of the company they invest.

But none of these investments are traded on a public stock exchange. Also, all these investors take stakes with a view to exiting when the companies have turned profitable and when they think they will get a good value for their stake.

Angel investor:
These investors usually fund start-up ideas, when the business plan is still on paper.
Venture capitalist:
They usually come in when the company has just begun and is just testing the markets with prototypes.
Private equity investors:
These investors typically invest in more mature companies, when its operations have stabilised and are already generating good revenues and profits.