Asking family members to invest in your start up?

Question

What are your thoughts on asking or just opening up to family members/relatives to invest in your start up? Does this usually work?

Richard O'Dwyer · Accepted Answer

Never mix family with business

Sam Bauer · Answer

I think it depends very much on the family you stem from. In my root-family there was no entrepreneurial gene at all, I was watched like an alien, suspicious of trying to avoid real work. But when the parents or relatives are founders themselves already, then I think it's a totally different thing, then they understand themselves perhaps as early investors and want to encourage and support you, knowing the risks and providing precious advice.

Alex Gorman · Answer

I was always told that when it comes to friends and family "never a lender or borrower be."

Volodymyr · Answer

Yes, sure!
I think it's normal 
Also I am doing business with my wife 😊

Dimitrios Rallis · Answer

Seeking investments from friends and family can be an ideal way to raise seed money to get your company off the ground. This is also labeled as "pre-seed round"

Keith Lynn · Answer

@timz_flowers I got a good laugh out of this "I was watched like an alien, suspicious of trying to avoid real work" It's so true.

Answer

Ask? No No.. If they offer to invest, I'll consider

EnderWings · Answer

Only if your family members don't invest just because you are a part of their family.

Monna Lissa Raja · Answer

@timz_flowers I can relate to this very well. We mentioned our startup to both of my in-laws individually, my father-in-law had a really good response and offered to invest a small amount of money on a monthly basis even without being asked for it. On the other hand, my mother-in-law (and any relatives on that side) just probably thought it's just one of those crazy ideas we had. Father-in-law had been a businessman practically all his life.

Ben W · Answer

Yeah.. I wouldn't...

Answer

It's a much better idea to find the money from anywhere else!

Jahidul Islam · Answer

Cool

Trace Cohen · Answer

Totally fine to ask them, most just want to support you / might not fully understand what they're actually investing in 1)Make it clear there is a very high chance they will lose 100% of their money 2) It will take 5-10yrs if you are successful to get any liquidity 3) DONT offer them uncapped notes/SAFE - love those that love you first!

Devin Mull · Answer

The Startup in Question better not be an MLM . If its an Multi Level Marketing scheme dont be surprised if you get kicked out of the family.

Hussein Yahfoufi · Answer

Depends on the family member. If they usually invest in startups then I don't see the problem. If they are more of the mutual funds or index funds type then I would say no.

Asking family members to invest in your start up?

Replies