There are many ways to categorise investments. One way of doing so is to distinguish between the following two investment types:

  • Investment in the business sense meaning the payment of money for the acquisition of rights and the associated economic benefits and opportunities. This is done by granting loans or buying bonds, shares, real estate, patents, trademarks, etc.
  • In a broader sense, people make non-monetary investments by contributing their knowledge, efforts, work and time in relation to projects or companies for no immediate return but for the purpose of harvesting later.

Quite often, mixed forms or hybrids between monetary and non-monetary investments are executed, e.g. when a real estate developer buys a property (monetary investment) and then strives to enhances its value through his work efforts (non-monetary investment). The same applies to a managing director who acquires shares in the company he manages, whose value he wants to increase through his work input and who has rejected higher-paid jobs elsewhere.

For all investments, there are investment-type-dependent and investment-type-independent (i.e. general) risks.

General investment risks result from:

  • Mistaken reliance on false, ambiguous, or, incomplete information prior to making monetary or non-monetary investments;
  • Insolvency of the person or entity to be invested in;
  • Non-performance or poor performance of a contractual partner (performance risk)
  • Lack of information and/or insufficient control of the investment provider after the surrender of the investment funds;
  • Legal uncertainties due to unclear or incomplete contracts; and
  • Political risks, force majeure, market risk, change of law and change of control.

Barber Odenbach has served numerous monetary and non-monetary investors. Our team has the knowledge to negotiate and structure investment deals.

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