Strategic investor

An investor, usually a company, whose motives for investing include business benefits such as technology access, distribution or future acquisition, not only financial return.

Example

A logistics company investing in a route-optimisation startup it also buys software from.

Important

Its interests can diverge from other shareholders', particularly around a sale to a competitor.

Related terms

• Corporate venture capital (CVC) — Investment by an established company, usually through a dedicated unit, into external startups for strategic and financial reasons.
• Right of first refusal (ROFR) — A contractual right to match an offer before the asset or shares are sold to a third party.

Lessons that explain it

• A corporate investor may want the company more than the return — Corporate venture arms and strategic investors put money into companies for strategic reasons as well as financial ones, which can bring distribution and credibility - and conflicts. (9 min)
• Knowing what each investor needs back tells you how they will behave — Every investor type has a different definition of a good outcome. Mapping those needs explains most disagreements on a cap table before they happen. (10 min)

All 578 terms in the Investing glossary