Glossary
Minority investment
An investment in which an investor acquires less than half of the shares in a business, typically to fund growth or to let founders realise part of the value, while the founders keep control.
In plain English
Instead of selling the whole business, founders sell a stake, or issue new shares, to an investor. The money may go into the business to fund growth, to the founders to take some value off the table, or both. The founders remain the majority owners and continue to run the business, usually with the investor taking a board seat and certain rights.
Why it matters
A minority investment can be the right route for founders who believe the business has significant growth ahead and want a partner, capital or partial liquidity without giving up control. It is a common step for marketing technology and fast-growing agency businesses. It also introduces a new shareholder with its own expectations about returns and timing, which shapes the eventual exit.
What to watch for
- Minority investors usually negotiate protections: consent rights over major decisions, information rights, anti-dilution and rights on a future sale.
- The investor will have a view on when and how the business should be sold, which should be aligned with the founders' own objectives from the start.
- Valuation, share class and the treatment of future rounds all need advice.
- We advise on investments as part of our strategic work, helping founders understand and pursue the route when it is the right one.
Transaction language and legal treatment depend on the agreement and the jurisdiction. Written by Motion Advisory Partners as general guidance, not legal advice.