Corporate Investment

Corporate investment comes in many forms. As a small business owner, you can grow your business by selling products and services, but your business will grow even faster if you have more money to spend on marketing, advertising, and hiring and product development.  

When a company invests monies back into the company coffers, it helps to maintain the health of the business. Company investment can come in the form of stocks sold by the company to others for a fee. This fee is invested in the future of the company.  

In smaller companies, with no public offering, a corporate investment can be made using a percentage of the revenue. This investment may be in other company stock, in bonds or in other growth vehicles. The return on this investment is used to further develop products, open new offices or hire staff. To ensure that the money will be available for growth, the company must estimate the returns on the corporate investment and avoid investing in risky prospects.

Corporate investment can also come in the form of private investors who are willing to provide money to help the company grow in exchange for a position in the company or on the board, or to get some knowledge or skill from the company in whom they are investing. Investment can also come in the form of license fees paid to the company to license a software product, a patented technique or some other product or intellectual property that has value to the licensee.  

A company that does not have an investment strategy and has no plan to invest back into the company is usually doomed to fail. ‘Cash cows’ can be milked for some time and company officers can take all revenue out of the company, but without financial investment in new products and market penetration, most companies will not survive.