What is the difference between investors and entrepreneurs? Both of them are known to be risk takers. Both of them also help our economy grows by making the business sector booms. They may overlap in some aspects, but the two are different from each other. The following are the differences and dissimilarities between an investor and an entrepreneur:
1. An entrepreneur focuses on a new business idea, while an investor may focus on existing business ideas.
2. The entrepreneur usually approaches an investor to finance the equity of his business, while an investor approaches an entrepreneur, whom is potentially profitable, to invest money and earn income from his or her investment.
3. An entrepreneur contributes idea and passion (but may also invest money), while an investor primarily invests money on the business.
4. An entrepreneur is passionate and dedicated to his idea and would stick to it despite suffering some losses or period of breakeven, while an investor is practical and reasonable to an idea and may leave it when losses occur.
5. An entrepreneur is usually optimistic to his business, while an investor is more pessimistic and more focused on the things that might go wrong in the business.
6. Entrepreneurs view more on the qualitative side of business, while investors view more on the quantitative or financial side of the business.
7. An entrepreneur, when starting a business, expect many things (both quantitative and qualitative), while an investor, when investing his or her money on a business, expects more on the ROI (return on investment).
8. Entrepreneurs don’t necessarily focus on calculating the most approximate figure of return on a business, while investors usually calculate the return of business and arrive at an approximated or estimated figure.
9. Entrepreneurs could start entrepreneurship even without money, while money is a necessity for investors to start investing.
10. Although they can be both owners of a business, an entrepreneur manages the business and knows it more from its sales and operation to the feelings and behaviors of its employees and customers, while an investor may only know the business based on the financial and quantitative reports of the business.
Remember that although entrepreneurs and investors differ from each other, they need each other and they can be a great team to build a successful business. Furthermore, an entrepreneur can also be a financial investor of his or her own business, while an investor can also be more involved in the business he or she has invested. Finally, every nation or community needs great entrepreneurs and investors to develop its economy.