4 ms·
Have you considered a friend's and family round? Or opening up a round to you user base as a kind of crowd funding round. The startup I'm at did both of these
by bradwood 4y ago
Have you considered a friend's and family round? Or opening up a round to you user base as a kind of crowd funding round.
The startup I'm at did both of these to good effect.
You'll also notice VCs perk up once you've told them you managed to pull that off.
- spyremeown 4y ago>Have you considered a friend's and family round? Is this really a good idea? Not judging, just stirring the thought-pot.
- borski 4y agoIf there is no other available option, yes.
- ALittleLight 4y agoWell, not doing it is always an option. Burning the money of your friends and family may be suboptimal.
- teaearlgraycold 4y agoI don’t think “friends and family” means get your parents to bet their 401k on the startup. It means get your rich friends/uncle to give you money they’re willing to gamble.
- borski 4y agoSure. But it’s not obviously one or the other.
- PeterisP 4y agoOf course there is an available option - simply shut it down. If you aren't really certain of success, then causing friends&family to invest and lose money is much worse than shutting down, that's outright evil. There's nothing inherently good or valuable in the survival of a business - your business surviving is good if and only if it is a valuable, profitable business, and if it is not, then it's wasteful to throw good money (especially good money of people who trust you) after bad. And burning all your personal relationships by acting in this untrustworthy manner to your friends&family has worse long-term consequences than burning a startup.
- borski 4y agoYou assume swindling. Sometimes friends and family invest because they believe in you and/or the idea, and it isn’t always a problem. That’s all I’m saying.
- chaoz_ 4y agoyeah, it even has a name "Friends, Family and Fools"
- bradwood 4y agoit could be a good idea, if you believe in the business, have shown some good growth, and you make clear to your investors the risks. A lot of friends/family could get you a lot of smaller investments which could add up.
- sky_rw 4y agoI'm usually one to loathe the use of this word, but is there anything more privileged than casually suggesting "raising investment money from friends and family". It's surely rarified air one breathes when you can casually raise a few hundred thousand from your immediate social circle.
- borski 4y agoYou’d be surprised how many in your circle have more money than they let on, and even then, friends of friends, etc. Also, just because privilege exists doesn’t mean you shouldn’t use it if it does, for you; if the option is between the death of your startup or calling in some favors, the latter is the one you should take (assuming your bet in the startup is correct, but every founder tends to think it is, heh).
- shapefrog 4y ago> You’d be surprised how many in your circle have more money than they let on, and even then, friends of friends, etc. You’d be surprised how many in your circle have waaaaay less money than they let on, like orders of magnitude less.
- Conan_Kudo 4y agoIt is not wrong to consider it, but it's really important to make sure expectations are set well. "Friends and family" investment is not the same as professional investment. That means they'll actually care about the money and the business and you may burn relationships on a failed business you took money for. Professional investors don't really care, and if your business dies, they move on easily enough as long as you didn't cheat them.
- borski 4y agoSure. I grew up extremely poor. I get it. I just mean that even then, I knew some people who knew some people that had some money.
- 4y ago