Startup Funding Espresso -- Should You Take Money From Family and Friends?
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. I\u2019m often asked if you should you take money from family and friends to fund your startup. Outside investors will look at family-and-friends funding as a sign of support for your business.\xa0\xa0 If your family and friends won\u2019t invest, why should the outside investor invest? Many startups are reluctant to take family-and-friends funding because Thanksgiving turkey tastes different if things don\u2019t work out. In addition, there\u2019s valuation. I\u2019ve seen some startups give their family a special valuation because well, they\u2019re family. This becomes a problem later when raising follow-on funding from outside investors. You have to give them the same valuation or higher, or your family loses their equity position. My recommendation is to take family-and-friends funding as a show of support. But only as a donation and only in $10K amounts from each person. Offer to pay them back by supporting their project in the same way when the time comes. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today.-----For more episodes from Investor Connect, please visit the site at: Check out our other podcasts here: For Investors check out: For Startups check out: For eGuides check out: For upcoming Events, check out For Feedback please contact info@tencapital.group