Textbook definitions
An investor is a person or organization that puts capital into a project in order to earn a return. Investors can be passive (simply providing money) or active (taking part in management).
A business angel is a private investor who not only puts their own money into early-stage startups but also provides expertise, connections, and mentorship. The term arose in the US in the 1970s.
A shareholder is the owner of a company's stock, entitled to a share of profits and a say in management proportional to the number of shares held.
The Russian reality of the early 1990s
In 1993, Russia was going through a painful transition from a planned economy to a market one. Privatization was gaining steam, the first joint-stock companies were appearing, but the legal framework was severely underdeveloped, and the population's financial literacy was practically nonexistent.
The Law "On Joint-Stock Companies" wasn't passed until December 1995. Before that, the 1990 "Regulation on Joint-Stock Companies" was in effect — a fairly vague document. As a result, many terms were interpreted loosely.
Why the confusion arose
A lack of financial culture. Most Soviet citizens had never encountered concepts like private property, stock, or investment. Western terminology was translated and adapted haphazardly.
Underdeveloped legislation. There were no clear legal definitions. The same person might be called an investor one moment, a shareholder the next, a founder after that.
The speculative boom. The rise of financial pyramids like MMM, "Russky Dom Selenga," and "Khoper" led to anyone who handed over money being called an "investor" — even though, in reality, these were defrauded depositors.
"Angels with big ears" and other new coinages
Zhorik's ironic phrase — "angels with big ears" — reflects the era's typical mangling of Western terminology. Business angels barely existed in Russia at the time, but the term was actively used by con artists to lend an air of legitimacy to their schemes.
"Shaggy shareholders" is a jab at the disheveled, unprofessional look of many small-time investors of the era — often just ordinary citizens who, drawn in by ads promising quick riches, handed their savings over to dubious outfits.
Social context
1993 was a year of hyperinflation (reaching 840% by year's end), impoverishment, and the appearance of the first major financial pyramids. Amid the economic chaos, various get-rich-quick schemes flourished.
People standing at the doors of "VychMekh" (the Computing Mechanics building) were a typical sight of the time. They might have been:
- Defrauded depositors of financial pyramids
- Small shareholders who'd been stripped of their rights
- Investors whose money had "dissolved" into yet another scam
All of them could be lumped under the same term, since no clear distinction existed — not in people's minds, and not in the legal framework.