Startups Stack Exchange Archive

What is the difference between a partner and an investor?

If an Investor invest in my company, does that mean he is my partner?

If yes what is the minimum percent of stocks he should hold to be considered as partner?

If no whats the difference between a partner and an investor?

Answer 12877

I see three definitions of partner that are at least loosely relevant here.

(1) A partnership is legal entity where the owners are partners. This one definitely doesn't apply here you are almost surely a corporation or an LLC.

(2) Companies can have other companies be business partners that work together in a commercial relationship. Your investor is not a business partner.

(3) In common language, "partner" can more broadly mean "one associated with another especially in an action : associate, colleague". In this casual sense, you could call your investor a partner, but you do run the risk of confusing others who might think one of the above two definitions apply.

It really depends who you are talking to and the context of the conversation, but if you do call the investor a partner, you should understand the risk of confusion.


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