Is Your Family Investing In Your Business? Remember This Important Rule
Starting a company nowadays is easier than ever before. With so many resources available over the internet, you can go from a seed of an idea to a small team practically overnight if you have enough willpower. But one thing still plagues young entrepreneurs and halts progress more than anything else: money.
Friends and family are often the first to give both an emotional and a financial backbone to young companies when no one else can. In fact, they invest around $50-75 billion in startups every year, compared to $20 billion from angel investors. Since early stage companies aren’t likely to get loans or funding straight out of the gate, friends and family are the lifeblood of many new ideas and ventures.
Unfortunately, the chaos and tumult of starting a business can cause founders to mismanage the investor relationships with those closest to them, and they may not even realize they’re doing it. Here’s the catch about family and friend investments: you should always reciprocate with solid communication from your end. Brian Cohen has some tips in his book What Every Angel Investor Wants You To Know that can help you avoid messy situations with your closest supporters.
Brian Cohen has plenty of insight on how to keep investors happy in all situations, so check out What Every Angel Investor Wants You To Know in full.