Co-investor can be loosely defined as two parties who invest in the same company. Considering a co-investor relationship with someone can be overwhelming, and needs to be considered carefully. Statistically, two people are more likely to co-invest in a company if they have worked together at the same company and tend to succeed if they base their partnership on ability, not compatibility. While it is helpful if co-investors are friendly, it is not necessarily an indicator of future success. A thorough vetting process of the company to be invested in is still essential, but an equally important part of the decision making process must include a review of the co-investor’s worthiness.

A frequent use of co-investing can be seen where an investor pursues investments in a company along with a fund manager. Co-investing is attractive to investors because it is typically done with no-fees and no carried interest. This equity capital source is a way to generate much needed capital at every stage of company development. Co-investing has become a popular way to invest in a company – even in the fundraising stages. When faced with the need to raise money quickly, co-investing can provide the company with an option they may not have considered.

As an investor, co-investing can be an attractive way to invest in a company. Provided that a company has a system in place to comprehensively examine the various components of the company, it can be a relatively easy investment process. To create a well-defined portfolio of investments, the co-investor opportunities should be varied across different industries and offer various sectors, strategies and geographies. The current financial market is perfect for co-investment opportunities. Companies are seeking investors, and investors are seeking new opportunities as the global economy recovers. Seeking co-investor opportunities is a viable way to grow wealth and add value to a company.