September 3, 2020

What is the Link Between Investors and Tech Development?

The link between investors and tech development is more important than people might first think. In many ways, investors help to drive this sector forward with their money and expertise. Let’s take a look at some of the ways they can help developers and entrepreneurs.

The Exchange of Expertise

Investments aren’t always strictly about the exchange of money. Some also set up the chance for the investor and the company to enjoy a fruitful relationship. You can often find this amongst first-time business owners who have a great idea but don’t have the business acumen to move things forward.

With this route, investors often expect some percentage of equity within the business. They might end up on the board of directors, or with some other major stake within the company beyond strictly handing money over for shares or something else of value. This could be an important partnership that would allow someone to grow both as an expert within their own specific field and an expert in the world of business.

Furthering Research

Many investors are also choosing to push forward certain areas of research that they are most interested in. Private research can be a money-vacuum as companies and private labs try to keep up with government and university-led research.

Investors can help to fill this gap. Tej Kohli’s investments have helped to bring about developments in AI and bionic limbs, while Deborah Meaden has focused on eco-friendly projects like solar power and carbon-neutral schemes. So many other investors have helped these smaller labs to push towards new projects and new discoveries that they might not have managed on their own.

Small Business, High Cost

Another similar issue that can be raised is the cost of development itself. You might find that many smaller labs are not able to meet the high costs that can come with their line of work. Equipment and supplies are incredibly expensive, and a smaller lab can run into issues if it does not have the correct funding in place before starting a line of research.

However, it is these smaller labs that often have some of the biggest discoveries and breakthroughs. It is important that they are able to keep up with the costs they might accrue as they work. As a result, investors will often step forward to help them meet their goals. They could sponsor the purchase of a major piece of equipment, or they could help with some expensive expansion that the lab might not otherwise be able to achieve. Either way, their contributions are incredibly helpful.

As can be seen, the link between investors and tech development is incredibly vital. Those developers would not be able to make half the innovations they do if they did not have the backing of investors who recognize their worth. It is a partnership that goes hand in hand all over the private sector, and it has helped to produce some of the biggest developments in tech that we have ever seen.

About the author 

Peter Hatch

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