SalesHQ

One of the most interesting things to ask entrepreneurs is how they bootstrapped in the beginning and got their start-up capital.  More often than not...they have had friends and family invest in their venture. 

I had a serial entrepreneur who mentored me for a while.  Of course I believed in my own startup venture and I mentioned that I hoped I'd get 10K from my parents.  He looked at me and said, "The last people you want to invest in you is your parents".  They don't know what they are investing in and you have to know that they probably will lose their money.

Statistically he is correct...start-ups are risky and  and accepting capital from family and personal friends is equally risky.  What are your experiences? 

     Very interesting question.

      If my father was alive I would have asked him to join my adventure. He was a businessman ,smart,knew the ins and outs.The problem with this ,he would have wanted  control. That would not have been bad,as it would not have taken as long to start to make a profit. I am sure there would have been more direction with the business plan ,the growth faster.He would not have been afraid to make the decision towards growing faster. I was tentative,the  economic time was similar to the time today.I played it more safe,making sure the risk could be offset with a for sure thing. I was young and had no idea what was coming next.It took  five years reinvesting into the company to start making great profits. With my father it probably would have taken three years or less.Experience has its quality.

  I would never have asked my in laws.

    Depending on what type of business determines what kind of start up capital is needed. When I started a plumbing business in 1980 All I needed was a vehicle, tools,license,insurance.I was able to get it off the ground with  10 grand.Today  I  would need 20 grand as capital before  I could receive a license from the state. This has to be proven to the state before they issue you a license. After that,trucks,building,,insurance,set up  the incorporation. I would bet  the start up  would hit at least 250 grand.  SBA is where I would go or other peoples money.

  I guess you could work from home ,one truck,  tools and you still need 50 grand working bare bones.It is not cheap to start a business any more. The past few years banks did not want to loan money to start up companies, They want two  or more years showing profits to loan money,it is tougher to receive start up money.