business start up Archives - Angel Investors

10/24/202210/25/2022

No More Excuses for Small Business Owners for Not Growing Their Businesses

When talking about business owners related issues, solutions, and technologies, you will almost always group businesses as small and large. While the separation is there, it won’t be wrong to say that in a modern where digital technologies prevail, it should not be a problem for small businesses to compete with large ones. The large corporations have the advantage of having more resources without a doubt. However, there was not a time in the past when growing and expanding was as easy for small businesses as it is today.

Digital Marketing for Everyone

Digital marketing starts with a website today. When it comes to website designs, more money does not always mean a better design. If owners are working with the right people and are clear about your requirements, your website can be just as impressive as the website of a large business. In fact, internet users today are more in favor of simplistic websites with a focus on the information they are looking for rather than the glitter and sparkle.

As for social media marketing, there is no difference in the size of the market that small and large businesses have to target. They are both targeting global audiences and how good they are at it is not defined by how much money they put in their marketing efforts. Social media marketing is free marketing, so there is no excuse as to who has more resources.

And if you believe that the large corporations make it to the top of the search engine results, you always have a better and more effective niche to compete within – local. With local search engine optimization, small businesses can compete with the medium and large businesses head to head. In simple words, regardless of the size of the business, everyone has access to the same market and same people today. What matters is who does it better.

Digital Solutions Are Available Specifically for Small Businesses

When it comes to software solutions for businesses, the focus is not on large corporations anymore. Today, all types of software solutions have their versions built specifically for small businesses. These digital solutions allow small businesses to cut down their costs and make use of the same technologies that large companies are using.

Take the example of CRMs. At one point, there was a notion that customer relationship management software are only for large businesses, but the things have changed quite a bit today. Web-based CRM are a revelation for small businesses. First, these CRMs provide great marketing, database, customer service and sales solutions to the businesses. Second, they are unbelievably affordable. If you own a small business, you don’t even have to worry about software integration, hardware compatibility, updates, and upgrades, etc. Keep in mind that with in-house solutions, these are the costs that make it difficult for small businesses to grow financially.

With web-based solutions designed for small businesses, owners can now have access to a world-class CRM at a fractional monthly or yearly cost. Other affordable digital solutions available include invoicing software, bookkeeping software, payroll software, etc.

Customers Have the Power in their Hands

The Internet has empowered customers like never before. Owners can’t say that just because a business is in multiple countries, it will be impressive enough for people to buy its products. The amazing thing about today’s economy is the power that customers have in their hands. Online reviewing websites, YouTube videos, blogs, etc. are among many platforms that allow customers to know more about businesses. In fact, even Google now puts business ratings and customer reviews right within its search results.

What this means is that when customers searches for a business today, They are sometimes able to see the reputation of the product they are going to buy. Furthermore, negative reviews from customers can affect business sales, giving other businesses a chance to make their name.

Furthermore, it’s not just the quality of products that matters today. In the modern world, businesses are competing for better customer experience. If your business can give customers the experience they are looking for, your growth is inevitable despite the small size of your business.

Funding Is No Issue for Startups

It is always the starting days that matter the most for business. When you are a startup, you are looking for ways to fund your business so you can materialize your idea and polish your product/service according to the requirements of the customers. Finding a platform where you could connect with angel investors was a challenge in the past. This is not an issue anymore.

It is now easier than ever for small businesses to get in touch with investors and get the right amount of investment that sets them on the path of growth. These are websites that act as a bridge between investors from all around the world and startups.

With online funding websites, all you have to do is create a convincing pitch that explains the viability of your startup to the investors and its scope. Your business plan along with all the necessary information that you think investors should see can be posted to the website and start getting the right kind of exposure. If you have done your homework and have a team of right professionals on board, getting the right investment can come sooner.

Final Words

Owners can see that a small business and startup business can overcome almost all of their challenges much more efficiently today. Starting a business has become so easy that even students can be entrepreneurs. They can lay the foundation for a business using just their pocket money. From connecting with the right investors to cutting down operational costs, all can be done from the comfort of a person’s home. The only thing that makes the difference today is if you are confident enough to take the first step.

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01/04/2019

Business Opportunities for 2019

The constant change in consumer demands and requirements has led to a continuous shift in the nature of businesses and the way they are operated. Globalization and technology are changing the business world at an exponential rate.

Running a business online, something that was a far cry about 50 years ago, has become an absolute necessity today. Similarly, opportunities that might have seemed impossible are most lucrative ones to avail.

So here is a list of the top businesses, if agreed upon with utmost enthusiasm and determination, which are bound to bring success in the coming years.

E-Commerce Distribution Center

As clichéd as it might sound, the e-commerce sector is growing every year and is expected to grow by 56% by 2020. Countries that are particularly economically developed, such as the US, have a growing sense of satisfaction in its people when it comes to ordering online. The continuous rise in e-commerce markets is especially due to the increased use of smartphones.

Thus, with such favorable conditions, e-commerce markets are inevitably rising as well. Albeit platforms like Amazon (B2C), eBay (C2C), makes it a little challenging for new businesses to grow, and those who risk entering this lucrative market are bound to look for solutions with distribution.

The reason being the task of storing and distributing is a significant part of running an e-commerce business, and the increasing number of online small and medium-sized businesses will inevitably look for such services to help them compete.

Data Crunching (Consultation)

Not very long ago there was a time when data at hand was insignificant for making substantial analysis, but with the increasing use of social media platforms and websites, valuable data is generated every other second.

This idea is not only about collecting a vast array of numbers, but it is also about deciphering them in a way that gives insights and understanding to the business in question. Thus, data related fields are at a continuous rise. With the right combination of skills and resources, this business opportunity tends to be a lucrative one.

Car Charging Station

We are all aware of the increasing popularity of hybrid – all-electric cars in particular. Encouraged by the state, entailing long-term benefits and being environmentally friendly, these cars are here to stay. With an incredibly high demand for all-electric cars, such as the Nissan Leaf, which was sold out before even arriving in the showrooms, there is bound to be a subsequent rise in the percentage of existing charging stations.

Instead of hundreds, thousands need to be built in order to cater to the rising demand for electric powered cars. The idea is not only to encourage the use of this eco-friendly vehicle, but it will also, most likely, eliminate the hesitation to take cars outside the city worrying about a charging station.

Privacy Protection Firm (Cyber Security Software Company)

Year after year, cybersecurity is becoming a major area of concern for many. From money (credit cards) to communication (emails, SMS) to even personal identity (social media platforms), practically everything has a virtual presence that is vulnerable to a breach of information.

With the increasing number of cyber threats, privacy protection companies are in demand more than they ever were. We can be sure that governments around the world are now taking reactive measures of passing cybersecurity laws to prevent beaches, data leaks, and related issues.

Social Media Consultancy/ Management

Social media platforms are breaking the conventional methods of doing businesses; stats have shown about a 198 percent increase in e-commerce websites due to social media referring. That is why companies nowadays are willing to spend significant amounts on the management of their social media accounts.

Social media accounts are not only boosting leads, but also significantly increasing sales and generating valuable insights for organizations to plan ahead.

Hence, there is a rising demand for agencies and consultants who are credible enough to provide the necessary social network support that organizations nowadays are eagerly looking for.

Affordable Elderly Facilities

The aging population is the US is growing at a rapid rate. It is estimated that by 2050 around one-fifth of the entire US population will be over 65, resulting in an inevitable requirement for old age facilities.

Since there is a general perception of poor quality treatment and other problems in these accommodations, it is pivotal that all such notions be overruled by establishing accommodation that offers superior care and caters to the current and future demands of this area.

Car sharing

Drawn from the concepts of renting houses and spaces, renting cars are next in line in the renting businesses. This business has the potential to generate millions with a simple rule of thumb; to charge at least 1% of the total cost of the house/vehicle.

This business is rising at a fast rate, as there are numerous people who prefer using cars for a short period of time or have a need for another type of car that is different from theirs.

These are precisely the reasons why car-hailing services, such as Uber, have been so successful in such a short span of time.

Innovative Tech-Tools Providers

With on-going breakthroughs in technology, artificial intelligence systems, virtual reality, and so on, are in regular demand nowadays. AI is required in manufacturing as well as the service sector, while virtual reality is being used in studies (medical and art), as well as businesses to visualize business and financial models.

However, various studies have proven that gaining access to new system/technology is not nearly a challenge as implementing and sustaining that system. Change theories are not new to us; they have and will always give us a general picture of enforcing advancement in the current practices.

Hence, there is a need for catalysts – change agents – who not only deliver the right technology to meet the organization’s need, but also ensure that the people in the organization develop a certain level of comfort with their new system.

This business has a lot of potential because it will not only tap the future needs of organizations for the latest technologies, but it will efficiently bridge a gap between inventors and end consumers.

Access our network of Angel Investors, Venture Capital or get instantly matched with a Lender. Create a crowd funding campaign or get a business plan by visiting us Funded.com

08/11/201701/08/2018

How To Make The Perfect Pitch To An Angel Investor?

The time has come for you to make your pitch to your angel investor. Everything you have invested into your business start-up rides on this moment, and it is up to you to make the best impression possible. While it can be easy to get bogged down in the details of your presentation, you need to consider what is needed to pique the interest of your seed investor and not bore them into submission.

Think about what makes you stand out as a business startup and use your assets to your advantage. Sure, the numbers are important in your pitch, but they should be used judicially. Your private investor is investing in you as much as your business plan, and your performance will set the stage for that all-important funding.

Keep these tips in mind when you are developing the perfect pitch for your angel investor and be sure to keep it light, entertaining, and above all interesting. You only have a few minutes to garner their nod, and you want to make the most of this opportunity.

Be Relatable

Because an angel investor is buying into you as much as the products and services you are looking to market, you need to sell yourself first. Allow them to see inside your world with antidotes that they can relate to. A good story can connect you to your angel investor and allow you to be a reliable source that they wouldn’t mind working with.

Keep It Simple

You may be immersed in the industry and the lingo that it uses, but your seed investor will feel alienated by your use of jargon if they don’t understand. Simplify the message and teach them along the way. Don’t use acronyms and be sure to avoid technical specs if they aren’t necessary.

Incorporate Images

The images that you choose to showcase to your business startup are crucial to helping your private investor see your vision. Most people are visual and need the help of visual aids to get the message across. Keep your images simple and make sure they properly represent your products and services. A typical power point presentation uses 12 slides, nothing more, nothing less.

Invite the Team

You have no doubt selected the best people in the business to work with you. Your angel investor needs to see the whole team to know how valuable they are to your business startup and how they, along with you, can propel the company forward. Invite them to the pitch and introduce them and their strengths.

Show Them How It Works

Let your angel investor see your products up close and personal. Be sure to show them how it works. Provide them customized samples that are geared toward their likes. It’s even better if your product can solve a problem they have right now. They’ll be able to see the merits immediately and invite you into the fold. If it’s a service that you offer, let your angel investor try it out. Make this part of your pitches hands-on and personal as possible, so you stand out.

Tell Them About The Money

Money talks and you need to show your current revenue stream and the impact the new funding will make on your business. If new start up, show the capital disbursements in how the Angel Investors funds will be used. Be ready to provide details on your sales revenue year-to-year as well as all your costs. You should have these numbers memorized, so you look prepared. Also, don’t forget to announce any large orders you have secured that will be coming in the next month or year. The more you can show your private investor that you have the goods to make this work, the more opportunity you have to secure that funding for your business start-up.

Use A Realistic Valuation

When it comes time to provide your valuation, it is key that you are as realistic as possible. A valuation that is too high can show your inexperience while one that is too low can predict your demise. This is the most common error that business startups make, turning off investors before they have even seen the product.

Let Your Passion Shine

You certainly should show your passionate side when it comes to expressing why you need funding from your angel investor. If they see the motivation and excitement you have, they will be more willing to fund you as they know you will give it your all to succeed.

Propose An Exit Strategy

During your pitch, you need to show your investor how they will recoup the funding that they are offering up. Remember they don’t want to be a lifetime partner. They want to earn as much as they can and get out. Propose a payback strategy as well as an estimated timeline. This will allow them to see the ROI of funding your startup business and the potential for their investment.

Don’t Forget The Follow-Up

Once you have privately pitched an investor. You still need to seal the deal and ask for the sale. Follow up with persistence to get your funding as your investor may move quickly to a new startup opportunity. You’ll also have to hammer out the details through negotiations that could be tedious to agree on. Get the process going immediately so your startup business can move forward too.

More detailed information and useful advice can be found at Funded.com. If you need to access our network of angel investors or a business plan for start-up funding visit Funded.com

04/14/201706/29/2021

Dealing with investors: What to do before and after close II?

Private equity investors are considered as one of the most important people for those who want start or expand their respective businesses. After all, the amount capital that they provide and the way these are handled are among the factors that make or break a startup.

Unfortunately, a number of entrepreneurs think that dealing with private equity investors are limited to the period when the company or business is raising funds. Some believe that once the funding round has closed, the money will fall any time regardless of how they transact with the partners that signed a deal with them.

The reality is far from this misconception. Instead of forgetting about the investors who pledged to provide funds for the business once the money had been transferred, entrepreneurs must keep in mind the significance of giving importance to these people. After all, entrepreneurs would not want the investors pulling out the money in a middle of a crucial project.

Here are some tips on how entrepreneurs should deal with investors before and after the close of the funding round:

Before the close:

Once of the most crucial things that the entrepreneur must do during the funding round is to find the appropriate investor for the company. This would depend on the type of business that he or she is into. There are investors who prefer medical-related companies, while others want information technology startups, among others.

Regardless of the type of business, entrepreneurs must find a private equity investor or those who understand the risks of investing in the nature of the business. This would mean that the investor is willing to let go of his or her money for seven years, and put it in a rather risky and illiquid asset.

To counter the risks, the entrepreneur must explain to the potential investor the positive side of the investment – for instance the high rate of return for the successful ones.

Perhaps the most important advice for the entrepreneur is to find an investor who shares the vision of the company. This is highly relevant as it would help in the growth of the business.

After the close:

Once the agreement between the entrepreneur and the investor has been signed, the former must continue to look after the latter. This is necessary as it increases the possibility of future contributions from the said investor.

“Taking care” of the private equity investor does not take much. The business owner just has to provide regular updates – whether monthly or quarterly – to keep the investor on the loop. Likewise, requests must be kept reasonable and thoroughly explained. This will surely get the business owner on the good books of the investors.

Dealing with partners, especially private equity investors is not an easy task. However, doing this the right way will ensure the continuous flow of support for the business.

More detailed information and useful advice can be found at Funded.com. it offers expertise and assistance with developing and funding your concept. If you need to access a network of angel investors or business plans for start-up funding visit Funded.com

01/12/201706/28/2017

Five People You Should Meet Before You Start A Business

As a budding business owner who is about to venture into the entrepreneurship journey, one of the best things you can do to set yourself on the right path is meeting people. Of course, it is possible to start out all on your own but it is difficult to really go to far without having help from one person or another. The kind of people you meet and how they influence you will have a huge impact on your business and how successful it turns out. The different types of people you will meet will help your business in so many different ways such as forming of partnerships, people who are connected to major resources you might need in your business, people with more experience than you do, and people with different connections and networks.

Someone who is experienced in what you are doing

This category of people can be called the mentor. A person that has done similar to what you are doing. Such a person will have the necessary skill and required wisdom and experience,that you may not have yet and can successfully help you out with tips and advices that will help you solve some problems easily. In addition,this person may have a network of contacts that you can add to your own network pool.

Mentor

For your business to be successful and gain ground in any area, you have to get in touch person who is well known and respected in the community. It may not necessarily be someone that is in the same field of expertise. It can someone you admire or has positive input and encouragement. You get the added benefits of having this mentor could give you a major boost and provide insight from being outside the box.

Peers

These are the people in the same niche that you are in and within the same area. Although they might not be as much influence as the first two, but there is a very high chance that you can make use of their network of contact and they can make use of yours. You can share resources with them too since you will most likely face the same kind of problems.

Local talent

You will need some skill-set that you may not have. There is a good chance that you may find someone or people who can assist you in one skilled area or the other within the vicinity of your business and may be willing to help or give you free advise.

Business Plan Writer

Your business will surely need some capital for you to start with and no matter how frugal your start-up capital might be. Having an experienced business plan writer write your business plan has experience formatting your business plan in a way a bank or investor would expect to see. Having a business plan is a road map of what you expect and a guide for your business.

12/29/201606/28/2017

Importance of a Business Plan

Before a business is able to commence on its operations, it is important to have some specific details about the business mapped out. This actually varies from size to size as it can be just a few sentences or even take over a hundred pages containing different formal sections, title page and table of content. Basically, a typical business plan has an average page range of 15 – 20 pages and if comprehensive, it should consist of three sections – The business concept, the marketplace and the Financials section. These sections are the further broken down into seven more components which are the business overview or summary of the plan, the business description, market strategies, competition analysis, design and development, operations and management, and financial information. However, it does not matter how long or lengthy a business plan is, what matters is, the level of importance that should be attached to a business plan should be high. In this articles we will be looking at the importance of a business plan

A business plan makes direction of the business clearer

The main purpose of writing a business plan is to have a clear view of the business and what the business’ goals are over a period of time. Being able to have a clear view of the direction in which a business is headed helps understand what needs to be done to achieve progress for the business. Making business direction clearer may include things like business description and its services or details of the ideal target customers of the business.

Planning for the future

Time is a key factor in the development and growth of a business and a business plan can effectively take time into factor to make forecasts on possible market changes, market trends and new innovations or directions to go through as the business progresses. Having a clear direction helps a business know how and where to start from but future planning helps to have an idea of what the business’ goals should be.

Funding or financing purposes

A business plan, a comprehensive one, helps determine the viability of a business in terms of profit. By putting statistics, figures, detailed plans and facts in writing, it will be easier to convince an investor to fund the business.

Attract people to join the business

A business plan is all a business owner needs to bring in partners, executive level employees or even secure supplier accounts. With a business plan, anybody who might be interested in the business can get the needed conviction and see the potential of the business and consequently become a part of it.

Effectively manage the business

With a business plan, the organization is well structured and each management position gets their role mapped out. A business plan also makes it possible to monitor the progress of the business and check if the business is well on its course to meeting up with targets, operational milestones and goals.

The importance of a business plan is not limited to these specific points. A Business plan can also help you achieve other goals such as establishing new avenues of product development, securing suppliers and defining alternative marketing strategies to engage customers. It is an important tool for every business owners and should not be taken for granted.

05/24/201606/28/2017

How Do You Know Your Business Idea is Good?

Investors want to fund good business ideas. That’s a broad statement because what seems like a good idea to me may be different from what seems like a good idea to you. So many ideas never seem to go anywhere. Some are just so uninspiring that they can’t seem to get the attention of anyone, much less investors. You can even write a whole business plan around a bad idea, leading to great disappointment when investors spot the fact it’s bad.

A good business idea is much more than just an idea. You can sit there all day and come up with ideas, but that doesn’t make them good. Good business ideas have certain qualities that differentiate them from other ideas. For one thing, a good business idea fulfills an unmet customer need, and it is often a need the consumer doesn’t even recognize yet. That may sound odd, but great ideas are often not great until someone invents a product or service.

Determining if a business idea is a good one requires more than just knowing the market will appreciate products or services. The idea must be feasible and realistic in terms of production costs, the time from funding to sales, profitability and safety. A good business idea is also one that can be brought to fruition because the entrepreneurs have the knowledge and skills needed.

There are more qualities associated with good business ideas, but one of the most important is related to innovation. Good business ideas offer a new twist on products or represent creative and innovative new products. The new twist or innovation should represent something that matters to people which means it brings some kind of satisfaction.

There are no hard and fast rules or magic formula to define a good business idea. Instead, investors will consider all of the qualities of the idea coupled with the marketing, competitive and financial factors.

04/18/201606/29/2021

Think of Funding When Writing a Business Plan

One of the mistakes made during the writing of business plans is treating business funding as if it is a completely separate section with no real relevance to the rest of the plan. In other words, you write your executive summary, business description, market strategies and analyze the competition in a funding vacuum. Then the financial section gets tacked on, and it basically states you need money and here’s how much money you need.

But investors read business plans closely, and they are looking for a particular type of company that fits their requirements. The words you choose to describe your business and the presentation counts. For example, if you are looking for a business loans from traditional lenders, they are not going to be impressed with hype in the least. You may have the most “stunning” invention ever created that will change the way mankind lives once your product hits the market, but a bank is going to see that kind of claim as marketing hype.

Professional From Beginning to End

Business plans are unique products. They must be interesting, professional and well written while being interesting, entertaining and exciting. That’s not easy to accomplish which is why so many entrepreneurs decide to get professional help writing their plans. Yet one of the most important features that a business plan should have, yet is often overlooked, is funder appeal.

In other words, the funders you plan on appealing to need to be attracted to what you say in your business plan from the beginning all the way to the financing plan. It’s easy to get carried away while writing because you’re excited about your business and finding startup funding. This can lead to the use of a lot of superlatives that make your business plan look like a lot of hype without substance.

Polish the Product

As a entrepreneur you are not a huckster, so the business plan should not make you look like the equivalent of a snake oil salesman. The business plan that makes a lot of wild promises is not going to attract equity partners. Unsubstantiated claims will not get you approval for business loans. Statements that portray you as a gambler will turn angel investors away.

Business plans should be polished products that are consistently honest and give the right impression throughout the entire document. You can’t write a plan that is sassy and reckless and then expect venture capital funding to be approved because you decide to get serious in the section on financing.

Payment and Plan in Full

Polishing business plans also means making sure the plan is complete. You are in a hurry to get your plan done and to find financing, but a condensed plan won’t get you anything except rejected and especially when looking for startup funding. Business plans prepared for venture capital firms or equity partners need to contain all of the important information about your business. The same thing is true for angel investors. If your plan is missing essential information including marketing plan details or financial projections or only summarizes an operational plan, then the assumption will be you have not bothered to work through these details.

The original business plans that entrepreneurs use to find business funding need to be comprehensive plans that are consistent and always keep potential investors in mind. It never pays to skip the details.

More detailed information and useful advice can be found at Funded.com. , it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need to access a vast network of business people, entrepreneurs, partners and service providers to help you start, finance and run your business, check out Funded.com

01/28/201406/28/2017

The secret behind the success of small businesses

People often think that having a small business is a difficult venture and while this is generally true to some degree, it must be emphasized that there are people who actually think of their small businesses as some sort of their pastime activity. This might be considered as a secret behind the most successful businesses.

The reality is that success of a business is relative to the level of passion of its owner. There are those whom people call “passionpreneurs,” who used their love for some things and transformed this into a small business.

For instance, there are people who love greeting cards who decided to start their own greeting card store. There are also those who love animals, and decided open pet shops to earn from what they like to do. These kinds of ventures hit two birds in one stone – establishing a small business and doing what the things the entrepreneurs love.

Unfortunately, having a passion and transforming it into a viable venture will not be as easy as it sounds. There are things that have to be addressed in order for the small business to become profitable and successful. Here are some things that a prospective entrepreneur will have to think about if he or she decides to turn his or her passion into a small business:

The Product

This is the most important thing that one has to think about when starting a business. For those who love greeting cards, it’s easy to think about the product – the greeting cards themselves.

But what about those who are passionate about other stuff like animals? Will the business sell animals, or offer services for pets? This is perhaps the most important question that a would-be entrepreneur will have to ask his or herself. After all, the product is the most important thing for a small business.

Marketing

Business is about engaging other people to avail of the product or service. And while there may be a handful of people who are also passionate about the idea of animals or greeting cards, there is also a need for the business owner to engage other “less passionate” customers to look into business. This is where marketing comes in, and it asks the question: How will you encourage other people who are not as passionate as you are to pay for your product or service?

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com

06/04/201306/28/2017

The risks of family-funded startups

Funding remains one of the most pressing problems faced by business startup owners. More often than not, entrepreneurs find themselves thinking where they would get that money that would help them establish their respective businesses. And while there are a lot of funds available out there for business startups, the reality is that not all entrepreneurs get the financial support coming from angel investors or venture capitalists.

In the end, a lot of business owners who need financial backing rely on the easiest source of funds that they can think of – their family and friends. Initially, this idea is seen as a very good solution to the money problem. After all, relatives and friends are often seen as best people who can support someone who has started his or her own business. But is it really wise to ask your relatives or friends to invest in your business? For most experts, the answer is no.

Entrepreneurs are often advised that they should never mix their personal lives with their professional ones. Doing so would often result in problems concerning the overall performance of the business. A lot of professional entrepreneurs believe that asking for investments from family and friends are not good for the business due to the risks that could lead to serious relationship problems.

Business startups are not always successful. In fact, some studies note that only 25 percent of startups actually expand and become successful. For the remaining 75 percent, it means failure – and loss of lots of money. Such events, while usual for seasoned investors, are not often experienced by your relatives and friends. Unless they are fully aware of the risks, relatives and friends should not be asked for financial investments in business startups.

Moreover, rifts between those involve in the business can arise once the startup begins expansion. With the entry of secondary and more professional investors, the issue of profit often becomes a sore point.

History shows that a lot of businesses failed because of the problems arising between family members. Thus, business startup owners are advised not to get their family and friends involved in their businesses if they have other alternative to get financial resources.