Startup Funding

Family, Friends and Other Funding Sources

Funding From Family and Friends

Your Family and Friends

During their first round, many startups raise funding from family and friends to get the business up and running.

Those who are considering family and friends funding need to consider the type of investor they need and ensure that the investor profile is met.

The person should have sufficient money and be able to lose some of it with no impact on his or her lifestyle.

It is also important to think about how well connected the potential investor is:

1. Can they help make a deal with a key customer?
2. Do they have industry or domain expertise?
3. Do they have a startup or business experience?
4. Are they an accredited investor?
5. Are they an active or passive investor?

These are just some of the questions you’ll need to answer to know if they are a fit for your deal, but the above is a great start to finding an investor match.

One of the top questions startups tend to ask is: Should I take money from family and friends to fund the business?

The general answer is: Yes.

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