Funds from Friends and Relatives

The next most obvious individuals whom you can ask to invest in your venture are friends and relatives. All of us have friends from various contacts over the years. We have former school and/or college classmates, ex-colleagues, business associates,  and so on. Similarly we have relatives related from our immediate family or our spouse and so on.

Some of us are afraid to ask friends to invest in their business venture for fear of spoiling a friendship.  This need not be so if one approaches it from a professional point of view rather than from a personal perspective. Present your business idea to your friends or relatives in a professional manner as one does when presenting to an outside investor. State clearly to them that you are not asking them to do you a favor but to consider the proposal from an investment perspective. Be prepared to answer questions likewise and accept all feedback and comments seriously.  In the event your friends or relatives decide to invest, say that you are appreciate of their investment and will endeavor to give them a good return. If they decline to invest, treat it as a investment decision rather than a failure to support you as a friend or relative.

Remember that with friends and relatives, if the business venture turns sour, relationships may become strained. On the other hand, if you did not ask them to invest and the venture turns out well, you may well receive comments like “Why didn’t you ask me to invest?”.

Invest and Launch

Capital Required

Funds from Yourself and Family

Funds from Friends and Relatives