Startup Capital Funding Santa Fe NM
Creative Business Financing Options: Friends and Family
Blood can be thicker than water in your search for startup capital funding. Family and friends can be a great source for bootstrap financing. They’ve got a vested interest in your personal success, and they may be willing to take a chance on you that no bank would. But with loved ones, you’ve got to structure any financing for your small business very carefully – and understand that the future of the relationship may ride on the success of your new venture.
You’ve got a great idea for a startup business, and you just need a few thousand dollars to get it off the ground. But you’re pretty strapped right now, yourself.
Who ya’ gonna call? Mom and Dad! Your old college roommate, the corporate lawyer! Or maybe even your brother, who really should be investing in your business instead of buying 50 lottery tickets every week.
In turning to family and friends for some help starting your business, at least you’ll be in good company: a staggering 87% of private financing for startup businesses comes from relatives and friends of the entrepreneur, says the Global Entrepreneurship Monitor, a research outfit at Babson College.
But there are good reasons why some people call this form of business financing the “family, friends and fools” approach.
Here are our seven tips for tapping into family and friends for the dough you need to startup your business – without getting yourself “un-invited” to Thanksgiving dinner:
- Understand their motives
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