Know Your Investor (KYI) – Types and Points to Consider While Partnering

Industries are massively facing various threats including identity theft, money laundering, and illegitimate access. This is why the most crucial step is legit customers onboarding which if not accurate can lead to various threats. Alongside, businesses are attracting different types of investors to support their monetary uplift and generate revenues. But the question arises whether the investors are legit and not an imposter trying to manipulate the businesses’ functions.

Therefore, a seamless, user-oriented, and robust investor verification service is what businesses need. This is so as the investment sector is gaining popularity among criminals as they can reap various benefits while exploring the legit processes. To prevent such risks, authorities have put forth Know Your Investor (KYI) regulations alongside Know Your Customer (KYC). Through automated AI-powered investor verification services, industries can verify various types of investors and monitor their activities. 

5 Types of Investors and Potential Benefits they Posses

Simply put, investors serve the purpose of a catapult for startups as well as enterprises. However, if the businesses are not aware of who they are dealing with, they can be exposed to various risks, including money laundering, and financial losses as the worst of all. The wrong type of investors is less beneficial and more harmful. Therefore, industries need to make wise decisions while registering investors. The portion of the blog ahead covers several types of investors. 

  1. Peer-to-Peer Group or Individual Financiers 

Peer-to-peer financiers can either be individual investors or a group of lenders. Most commonly, these types of investors fund and financially support startups or small businesses. Industries applying for this type of support should carry investor verification online and startups should consult specialized firms.

  1. Angel Investors

This type refers to individual investors. Angel investors have a turnover exceeding $200,000 or have attained a worth of over $1 million. Individual investors most of the time assist entrepreneurs who are in the initial stages of creating capital. 

  1. Private Investors or Capitalists

Capitalists or private investors are the entities that put their hefty money in industries that are proven to grow. Private investors are largely attracted to businesses with high growth potential. However, progressive industries also need to comply with Know Your Investor (KYI) regulations before partnering with any source. Moving on, capitalists invest a sizable amount to attain significant revenue in return.

  1. Banks and Loans Providing Firms 

Banks, loans providing firms, and other financial institutions are considered the prime source for big or small investments. Industries looking for investments are required to fill in an application. The respective firm then carries out investor authentication before approving their request. This is why banks, financial institutions, and loan-giving firms are considered to be reliable, trustworthy, and beneficial for all kinds of businesses. 

  1. Personal Monetary Investors

Businesses in some cases ask their peers, friends, or other networks for their initial investments. Once they get stable they can go to other options like banks or capitalists. However, the owners should ask for identity documents beforehand and verify investor in time to deter any unforeseen risks. 

Investor Onboarding – Aspects to Consider While Pitching to Investors 

After looking for suitable investors, businesses should do their homework. They need to verify identities before investors onboard. Also, they should consider some more points including investment strategy, priorities, background checks, and more. Below are some of the considerations to be noted:

Research on Investors’ Previous Investment Records

It is the sole responsibility of businesses to carry out online investor verification before partnerships. This can be done by analyzing investors’ previous records. The portfolios provide information regarding the types of businesses the particular investor has dealt with.  they prefer dealing with. As per various sayings, investors massively depend on familiarity, therefore businesses should see money as the only motivator. 

Background Checks of Investors 

The second in line is to conduct background checks and determine if the investors suit the businesses. Moreover, businesses can employ investor verification services to authentically check the backgrounds. As per Shufti Pro News, these services are the most reliable and provide accuracy. Moving on, businesses need to check their area of expertise, for instance, an investor affiliated with real estate will be more attracted to the relevant industry. 

In the End

Investors can be the potential uplifter for businesses but on the contrary, can possess financial risks. To mitigate such concerns, industries need to incorporate investor verification services so that they can comply with Know Your Investor (KYI) regulations and ensure authenticity. For this, as Shufti Pro Funding highlights, digital solutions are the businesses’ go-to reliable options. 


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