How to Hit Up Friends and Family for Startup Funding
Even if you are innovative, talented, hard working and ambitious, you will still need funds to start a business and make it successful. If you have a mind-blowing business idea, the first thing you have to look after is finance. Most people look towards banks and other creditors and take loans on high interest rates. However, if you have some sort of credibility, you can hit up your friends or family members for startup funding, which may save you from the curse of interest and huge monthly payments.
Instructions
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1
Document your plan
Once you finalise your plan, the first step is to properly document it. It will help you understand the pros and cons of the project and whether it is feasible or not. You may fine-tune your idea in future and make certain amendments. If you are well prepared and have a written document in your hand, your chances of getting startup funding from your friends and family are much higher. -
2
You must have great persuasion skills
In order to convince your friends and family to invest in your business idea, you must have excellent communication skills. It would not be wise of you to expect your friends to invest in your idea until or unless you convince them about the fertility of your plan. Be persuasive and let them know about the high probability of future profits. Give them a proper presentation about the proposal if it helps. -
3
Be honest
Some people, in their effort to convince others for startup funding, have the tendency to portray an extremely rosy picture, which may be far from the truth. However, being absolutely honest is the best policy while presenting your idea, as it will help you avoid problems in the longer run.
You should depict the positive side of the idea as well as the negative side and then ask your friends and family to compare. If you are being honest, it will surely make a strong impression on the other person and it is quite likely that they will be persuaded. -
4
Address their concerns
Before your friends and family entrust you with their hard earned money, they would have a number of questions or concerns about your business plan. You must address their issues in a cool and collected manner and make them feel comfortable about the scheme.
