Just like a first date, I remember every detail of my first start-up. It was a busy time in my life, but there are many things that stand out. Thankfully, seen now in life's rearview mirror, those memories are lessons that allowed me to be significantly more effective in my current enterprises.
Our first investor was fond of asking about what he called "the three F's," as in “Who are the friends, family and fools willing to help fund the expansion of XYZ?”
The goal was to raise capital quickly so that we could expand and capture market-share. But, if you have a conscience, it isn't easy taking money from friends, family and people foolish enough to throw their savings at an untested concept. Accepting that money represents a promise they can trust you to get things done. The three F’s are likely liquidating some of their retirement nest-egg to fund your business. Can you live with yourself if you lose their money and cause them financial hardship?
I’m an emotional, caring person. I want to make sure the people with confidence in me can rely on my intentions. These are three alternative sources of funding I used to avoid needing money from the three F’s.
