1/ I generally make a distinction between operators and investors in small companies as I think the roles can exist separately. But, especially in small companies, the difference is more gray.

First of all, an investor in a small company can also be the operator, and often is.

2/ The majority of small company CEOs are also the owners of the company, meaning the investor and operator roles belong to the same person.

Furthermore, is an operator not an investor? After all they make the capital and labor allocation decisions in the company.

3/ They are effectively the investor within the company.

Perhaps the better distinction between investor vs operator is in what domain they make allocation decisions.

Does the person make allocation decisions within or outside the company?

4/ Perhaps they do both!

An investor may own multiple companies and therefore be making allocation decisions outside the company, but that doesn't mean they aren't also making intra-company allocations.

The line grows grayer...

5/ I'm starting to prefer segmenting investors/operators by allocation roles as it gives slightly more clarity - albeit not much more.

In public companies this is easy! There are shareholders and managers.

Private? Not so much...

6/ Perhaps this is all a useless thought exercise that I've devoted too much time for.

I'm curious how everyone else views the distinction, if you view it at all?