An investor is most often associated with the word “profit”, but in fact it is a synonym for the word “risk”. If a person buys an apartment for himself and is not ready to lose his capital, he is not an investor. This is a buyer, client, someone else, but not an investor. An investor is one who takes risks, but in return makes a profit, or does not receive.
Let’s see how you can differentiate investors in the development market.
There is a very clear difference. Ukrainian local investors expect huge profits, for any agreements they are ready to sign directly on a napkin, but if these agreements do not work, they take appropriate sanctions for those who have not fulfilled their obligations.
Foreigners are very careful. For them, 2% return is normal, and when they see a 30% return, they round their eyes and ask: how, and where, and why? Because they understand: high profitability is certainly associated with a high degree of risk.
By type of investment
Portfolio investors are passive investors. For example, LCD No. 1 is planned, but it does not have investments to finish building at least to the second floor and launch sales. A portfolio investor buys back part of the project and makes a profit from this share.
Our most common financial investors. In fact, they provide net credit – they give their money against the security of the object and take a fixed percentage, while not participating in profits. If the money is risky, the percentage will be high. And vice versa.
Mixed investments are most often practiced in large projects when the investor is ready to sell part of his project, but on the condition that the buying investor will attract financing – either his own, and then he will earn twice or borrowed money.
By type of partnership
There are principal investors who never partner with anyone, because partnership, especially in the realities of Ukraine, is a rake that is not always pleasant to step on. Such investors redeem a 100% stake and rely only on themselves.
The redemption of a partial stake when you are ready to play friendships and share risks and success. The main thing here is to agree on everything in advance, and preferably with the help of experienced lawyers who put it on paper in the form of a Corporate Agreement or Shareholder Agreement.
Summarizing the above: when you start looking for your investor who is ready to invest over $ 10 million, you should clearly understand who you are targeting and the standard requirements of such an investor. A kind of investment marketing with all its components.
If you want to attract investment, you need to do this systematically, totally and around the clock, and also be friends with physics, mathematics, law, economics, psychology, colorist and a dozen more pleasant and not so sciences. Yes, investing in Ukraine is difficult, but who said it would be easy?
Andrey Ryzhikov, CEO and managing partner of DC Evolution