A financial investor aims to increase company value to maximise the investment return rate on exit, while a strategic investor seeks long-term operational synergies.
Financial investors, such as private equity or venture capital funds, provide capital to grow the company and exit the investment within a few years. They focus on improving profitability and preparing the company for a potential sale. Strategic investors, on the other hand, enter companies with the intention to integrate them into their existing business. They aim to strengthen market position, expand product offerings, or enter new markets. Choosing between a financial and a strategic investor is crucial for determining the company’s future growth direction.
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