Entrepreneur – Investor – Lender

Let’s try to focus the difference between Entrepreneur, Investor and Lender

• The Entrepreneur takes the risk of using his funds in the project and expects a variable return based on profit from the operation, normally he believes in the project and likes it, put his name on it and aims at transferring it to the future generations.
• The Investor, that is also collecting equity funds, aims at reducing the risk, mainly during construction phase, through proper contractual clauses and then expects a quite defined return based on project, he does not have any special connection to the project and is prepared to sell it soon as selling becomes more convenient than keeping.
• The Lender is supplying finance to the project, the return should be calculated according to the interest rates and be independent from the profit. Other forms of funding a project are in the middle between the Lender and the Investor (mezzanine capital, obligations with profit shares, etc.)    

Quotation from: Gianluca di Castri – Complexity in Ownership Structure – IPMA 2021, ICEC 2022