When people hear the word investment, they would normally conclude that it entails money and effort. It entails money, yes, but effort can be less depending on the nature of the investment as it always goes hand in hand with the time spent to earn from it.
This isn’t going to be a technical description of investment but rather on how much effort will the investor give in exchange of a reasonable profit.
There are people who would prefer to fund a certain business rather than putting it up on their own. They are passive investors doing passive investments. An example would be investors will buy shares in Jackson real estate company rather than starting their own real estate firm. The real estate company already established a name of their own and there is no need to promote its presence through advertisements and this happens to be the most time-consuming and energy demanding.
However, since the investor just provided funds and didn’t exert that much effort, it is just rightful that he or she will get lesser percentage on the net profit. It would be agreed by both parties and should be put into paper with legal arrangements. This is to protect each party’s interest.