My business is generating some revenue and I am very fortunate to have a couple of supportive family members who would likely be willing to lend me some money to take the business to the next level.
I will be asking for $5k-10k from a couple of people and was wondering if I should give them some extra money upon repayment?
Like if I borrow $8,000 and give them $8,100 upon repayment. I haven't navigated anything like this and every story I have heard about founders raising a 'family & friends' round, they never cover the specific details of the borrowing/repayment.
Any input on how to proceed here would be greatly appreciated!
Has anyone raised money from family members before?
byu/ScallywagBo9 inEntrepreneur
Posted by ScallywagBo9
7 Comments
Working with friends and family is a dangerous game.
Yes my Dad has loaned me money a couple times for my businesses over the years, I pay whatever the interest rate is that was agreed upon.
I’ve taken loans from friends for business, we wrote a contract out just like any loan, outlining whatever terms we agree to.
Not just a handshake agreement.
5-10k isn’t going to get you far. Unless you have a rich uncle you’re wasting your time honestly. Network! Ask your family for a couple contacts of who they’d be willing to intro you to (who have deep pockets).
In tech, it’s not uncommon to pitch 100-200 venture capitalists before getting traction.
If your idea is worth investing in, 25k-100k would be nothing to the right people.
Think about how to 10x their money. Not 1.0125x lol
Not a good idea
This is an awful idea. If you can’t pay back the loan, you’ll burn a bridge with family members.
Complete a contract for each loan, this makes you more trustworthy and gives them (friends or family) a sense of security