Also, do you have any resources on best practices?
Ask HN: How do you step by step raise money from family and friends?
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Re: Ask HN: How do you step by step raise money from family and friends?
#2Step 1: Have family and friends that have money
Re: Ask HN: How do you step by step raise money from family and friends?
#3Seems like you just put together a plan and an MVP and show it to them, then see if they have any interest in investing? I've always avoided this as I don't like to mix personal relationships with money. Most friends and family aren't sophisticated investors, and unless they are ok losing all their money, it seems like a recipe for resentment.
Re: Ask HN: How do you step by step raise money from family and friends?
#4Step 1: Have family and friends that have money
haha helpful
Re: Ask HN: How do you step by step raise money from family and friends?
#5Seems like you just put together a plan and an MVP and show it to them, then see if they have any interest in investing? I've always avoided this as I don't like to mix personal relationships with money. Most friends and family aren't sophisticated investors, and unless they are ok losing all their money, it seems like a recipe for resentment.
i see. very helpful, tx
Re: Ask HN: How do you step by step raise money from family and friends?
#61. come up with an idea
2. validate it
3. make mvp
4. ask them and show it
5. make sure not to lose all the money or they might hate you
Re: Ask HN: How do you step by step raise money from family and friends?
#7I started an ISP in 1997 with a friend I met on a BBS. I told my mom about the business plan and started with used equipment and 10 telephone lines. I paid myself $4.50 an hour. Total startup was 10k. Half of which I borrowed from my mom and my partner did the other half. It changed my life. She explained to me (I was 18) about how much the money meant to her. How she had to dip into her retirement fund to do it and how she would pay penalties on the money. She gave it to me without hesitation though. Best decision of my life. Grew the ISP for 3 years and sold it for a hefty profit to a telephone company. I am and was truly blessed with a parent that believed in me. I hope you can find something similar.
Edit: when we sold we were up to over 400 telephone lines.
Re: Ask HN: How do you step by step raise money from family and friends?
#8I've borrowed money from family and it can be sticky depending on the situation.
Make sure to be as clear as possible of the risks and be clear to yourself first and to them when will you cut your loses if things go south.
Otherwise, try to be as explicit as possible regarding terms and your plan. Usually family gives money based on relationship, not contracts and business/financial benefit and as such what is broken if things go sour is not a contract or cutting a bad business deal but relationships. So, watch for that.
Re: Ask HN: How do you step by step raise money from family and friends?
#9I started an ISP in 1997 with a friend I met on a BBS. I told my mom about the business plan and started with used equipment and 10 telephone lines. I paid myself $4.50 an hour. Total startup was 10k. Half of which I borrowed from my mom and my partner did the other half. It changed my life. She explained to me (I was 18) about how much the money meant to her. How she had to dip into her retirement fund to do it and…
Left out the best part about taking care of mom.
Re: Ask HN: How do you step by step raise money from family and friends?
#101. come up with an idea 2. validate it 3. make mvp 4. ask them and show it 5. make sure not to lose all the money or they might hate you
Definitely. Helps a bunch. Thanks.