Strategic Investors vs Financial Investors

Hi,

What is the main difference between strategic and financial investors?

When a strategic buyer buys a doughnut shop, they do it to make doughnuts.

When a financial buyer buys a doughnut shop, they do it to make money (by reselling it).

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I respectfully disagree with your comment about “strategic investor.” That type of investor brings deep investment-specific knowledge to the transaction. That enables said investor to pay more b/c s/he knows actions to take after the deal closes that will more than offset the risk of loss implied by the higher price paid.