What is a cornerstone investor?

A cornerstone investor is typically a large institutional investor, such as a mutual fund, pension fund, or sovereign wealth fund, that is given priority access to a company's initial public offering (IPO) or other significant investment opportunities. These investors are seen as strategic partners and are often sought after by companies looking to raise capital. Cornerstone investors are usually given a guaranteed allocation of shares at the time of the IPO, which can help to stabilize the stock price in the early stages of trading. They also provide credibility and confidence to other potential investors, as their involvement in the offering signals confidence in the company's prospects. In addition to providing capital, cornerstone investors may also offer strategic guidance and support to the company, leveraging their experience and network to help the company grow and succeed. In some cases, they may also take on a more active role in the company's governance and decision-making processes. Overall, cornerstone investors play a significant role in the financial markets, providing stability, credibility, and support to companies looking to raise capital and grow their businesses.