Education

Do you know about …Fundraising through Family & Friends

by CHRISTA NUIJS|2 September 2021

What Questions to ask F&F for Funding?
When you’re starting to develop your business there are a range of funding options to consider. One of the most attractive, particularly at the idea or early stage is family and friends (F&F). We’ve all heard of the entrepreneur whose mother, father, brother, sister all put in money to support their idea and often times these funds are provided with very sympathetic return expectations.
A family and friends round typically takes place at the start of your business, perhaps before your idea is fully developed.
But do you know what to ask them?
When talking with F&F, be prepared to discuss:

♦️ What type of investment are they willing and able to make? Will it be a loan, equity or a mix of both?

♦️ What type of role or influence do they want in the business?  Or are they happy to be a silent partner?

♦️ How you will balance your new personal + business relationship?

Also, don’t forget to think about what’s important to you before starting these conversations.  A business plan can help outline your business needs and goals for clear discussions with your F&F.

We recently covered Family & Friends funding for our members discussing pros & cons, potential risks, dived into funding options and shared a valuation approach (always hard to do this early on!).  We also shared the following resources:

  • Interview with Sarah Garner, found of Retykle, sharing her experiences
  • Business plan template
  • Pitch plan template
  • SAFE agreement link from Y Combinator
  • Articles and presentation overview on funding from family and friends

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