When & How to Ask Friends & Family to Fund Your Startup

As discussed earlier, the best way to look for startup funding in the family and friends’ circle is by filtering potential investors first. (Take a look at Whom in the Family & Friends’ Circle You Should Ask for Business Funding). Once you are ready with the list of potential investors, make sure to contact them professionally and have following ready with you.

when and how to ask friends for funding your startup

1- Your Business Plan: Not necessarily to have a detailed document. One page business plan will suffice thee purpose.

2- A Pitch: Make the investment and the ROI very clear to them and that’s the point where your pitch will play, i.e. how you convey them the benefit.

3- Investment Options: This depends on the fact that how much amount you are looking for and whether it will be from single person or multiple people. So, have the investment plans ready.

Now, as you are ready with all the prerequisites, decide a suitable time to discuss it. Definitely it’s not good idea to bombard them with the stuff in a cocktail party or a family gathering. Yes, in such parties you can ask them to schedule a meeting where you two can proceed the actual discussion.

After having a proper meeting schedule the best way is to provide them with the handouts first for their review. The handouts may include your one page business plan, a quick note on benefits of investment (bullet point) and the terms for investment based on the plan you are offering them. Once they have reviewed your document, the next comes verbal communication and this is the time where you can better use your skills to attract the investment.

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