Funding A Business With Family And Friends

From Smallbusinesslibrary

Family and friends can be a good source of capital to fund you new business venture, especially if other methods of borrowing prove problematic. There are obvious negatives associated with this approach as it can impact important relationships. However, some of the benefits such as fast access to capital and not needing to have a good credit score, can outweigh the drawbacks.

How to Ask Family and Friends for Cash for Your Small Business (About.com)
Provides 7 tips for asking friends or family for money for their business including why you should keep it formal and why you should put everything in writing.

How to Fund a Startup
Describes some of the disadvantages of funding a startup with friends or family including that if they are not accredited investors it will cause problems later if the company has an IPO.

The Friends and Family Round (Angelblog)
Describes additional pitfalls of family and friend financing.

Blood Money (Inc)
Discusses how borrowing money from friends and family can put tremendous strain on a relationship or lead to a great business.

Creative Business Financing Options: Friends and Family (Startup Nation)
7 Tips for tapping into family and friends for financing which, according to the article, account for 87% of small business financing.

How to Borrow from Family and Friends (Wall Street Journal)
Explains that you should set clear expectations on how and when the money will be repaid.