Investor Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Investor, written in plain English, along with examples of how it is used.

What is Investor?

Someone who invests.

History and Meaning of Investor

The term "investor" refers to someone who provides funds, either through purchasing stocks or bonds, investing in a private business, or any other venture, in the expectation of making a profit. The term "invest" comes from the Latin term "investire," which indicates putting resources or assets into something, in hopes of obtaining positive results in the future.

The basic concept of investment can be traced back to ancient Rome, where individuals would invest in assets such as real estate or ships. However, modern investment as we know it today truly came into existence during the 17th century when the Amsterdam Stock Exchange was established, leading Europe into an era of equity investment.

Examples of Investor

  1. A stockholder who buys shares of stock in a company, hoping to benefit from an increase in the company's value or the payment of dividends.
  2. An angel investor who invests in a startup business in the hopes of obtaining a significant return on their investment.
  3. A venture capitalist who invests in early-stage businesses with a high potential for growth.
  4. An individual who invests in rental properties, hoping to earn passive income from rental returns.
  5. A homeowner who makes home improvements or renovations, hoping to see a return on investment when they sell the property in the future.

Legal Terms Similar to Investor

  1. Security: The term used to refer to an investment in a company or fund that has tradable value.
  2. Shareholder: An investor who holds shares of stock in a company.
  3. Accredited Investor: An individual or institutional investor who has a certain level of wealth or income and is legally permitted to invest in certain private investments.
  4. Equity: The value of an investment in excess of any debt owed on the investment.
  5. Fund: A pool of money managed by an investment professional or team, often held to diversify investments across many securities or assets.