Ok, so there are several differences between an investor and a business owner…
Take time and effort for example. While the owner is actively working on the business, spending 40 hours a week (or 60…maybe 80 hours in the early days), the investor gets to swoop in with a quick wire transfer, then get on with their lives until payday.
Or consider responsibility. The pressure of making the business successful falls on the business owner. If anything goes wrong, no one could possibly blame the investor! It would be the owner’s fault. The buck stops with the owner. Good owners know this and respect it. That’s why they spend every day doing everything in their power to make sure the business succeeds!
But today, we want to talk about another difference between an investor and a business owner that doesn’t get enough credit…
The investor gets paid first, and the business owner gets paid last.
That’s right. When the proceeds come in, the investor is the first one to receive their cut.
The business owner doesn’t get paid until everyone else on the list has gotten theirs.
So, the business owner takes on all the responsibility for the business idea and day-to-day operations. Plus, they’re the ones working insane hours to make the business a success (and keep it successful). And they only see the rewards of their efforts after all the other stakeholders have gotten their share.
Investors, on the other hand, put up some funding, then kick back and wait for their passive proceeds to roll in.
Want to make sure you’re in line to get paid first? Become an investor!