Friends & Family | Equity Funding Fund Your Business | Dun & Bradstreet

Asking for financial support from your friends and family can be a great way to get your business off the ground. Get tips on how to approach friends and family for start-up money, and how to keep relations with your personal network strong.

Friends and family represents the first type of funding a new business often seeks the idea is pretty straightforward you reach out to family and friends to invest in your passion with the hope you’ll pay them back when you’ve made enough money saath nadeem of paradise forepaws tapped into his personal network when he first started i’m sachi nadine i am the

Founder and top dog of paradise for opossums a paradise for paws is a premier resort for cats and dogs our resorts are airport related i think of financing as almost a little bit of a jigsaw puzzle that you have to kind of put together it really depends on the needs of the business but also your personal risk profile the way i put the financing together it was

Really a combination of equity in-depth so from my analysis perspective i came up with a pseudo-scientific pseudo artsy formula 50 to 50 debt to equity ratio how i found the investors was first looking into my personal network to say who are the people who believe in this what i’m doing and also believe in me i decided to take smaller investors to kind of keep the

Risk profile for them low as well as a little bit easier for me to manage as well instead of one large investor being in the business a little bit too much it was easier to manage some of those smaller investors and kind of get all of the expectations right friends and family can also offer funding in the form of business services consulting or even supplies and

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Equipment there is more than one way to structure funding from friends and family as lloyd cambridge from nyc business solutions explains there’s different ways that you can structure ask your friends a family so you can essentially receive funds whether it’s be a gift you can also receive funds from friends or family determine debt and also in terms of equity

Right so you want to be very conscious and intentional about the type of financing that you want to receive from your friends or family so if it’s a gift what does that mean all right you don’t have to repay it back there’s no ownership if it’s if it’s debt you have to be very yeah you have to be concerned about the terms of that debt right and repayment and cash

Flow like you have enough money to actually be able to repay the debt once you actually receive it from a friend a family and an investment in our equity from a friend or family it’s a little different right it’s more than an ownership stake because they may have a say in terms of the day-to-day operation of your business the vision the strategy and things like

That these are different things you want to consider when you’re at making an ask from a friend or family there are lots of ways to structure a friends-and-family funding agreement while a handshake might do the trick when dealing with larger amounts and may be a good idea to talk to an accountant and a lawyer beforehand to make sure that you’re getting the right

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Documentation often organizations like score or local universities have programs in place that can give you free or discounted access to these professionals if your business is brand new or is just getting started your friends and family may be the easiest way to go about securing financing for your business to learn more about friends and family funding there

Are several guides about the subject in publications such as angel blog net venturebeat calm entrepreneur calm to name a few you

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Friends & Family | Equity Funding – Fund Your Business | Dun & Bradstreet By Dun \u0026 Bradstreet – B2B