relationship investor

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An investor who is an active participant in a business, as well as providing capital. Such participation may vary between appointing some members of the board of directors and informal consultation on a continuing basis. It involves a long-term connection between the investor and the company; a relationship investor is not in the business of selling out to make short-term speculative gains. Relationship investment is contrasted with the view that investors should merely hold shares, and let the existing management undertake the task of running a company.

Subjects: Economics.

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