There are two types of investments:

  • 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 to projects or companies for no immediate return but for the purpose of harvesting later.

Quite often, there are mixed forms between monetary and non-monetary investments, e.g. when a real estate developer buys a property (monetary investment) and then (further) enhances it with his own 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 a higher-paid job elsewhere.

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

General investment risks – regardless of investment type – include:

  • Mistaken reliance on false, ambiguous, or, incomplete information prior to making monetary or non-monetary investments;
  • Insolvency of the person or entity he or she has 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 and changes of law.

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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