Raising Funds Through Loved Ones for your Start-Up

There are many avenues to take when trying to raise capital to launch your start-up, develop a product, or even grow an existing business. We’ll focus on the pre-seed round. This round is typically designated for any funding done at the very beginning stage of your start-up. At this stage, you haven’t received any capital from outside investors. You need the money to get started, your savings aren’t enough, and you’re connected to loved ones with financial means.

Raising money through family and friends

Never ask for money from family members or friends who cannot afford to lose the money they lend you. Often times, start-up founders are told to get capital from loved ones, but the truth is, not everyone is born into or connected to a family with financial means. It’s not always realistic or possible to collect money from parents, siblings, extended family, or friends. BUT, if you are surrounded by loved ones who are in a position to assist you financially, start here first. This method of fundraising is called the Family and Friends round. It’s highly encouraged for founders at the very early stage of their start-up.

An early investor in your business or start-up idea is investing in you. They’re investing in your ability to complete what it is you set out to do. They’re investing in your drive, determination, and persistence to make your idea a success. They’re also investing with the understanding that the first sum of money they lend you will most likely never be returned to them, but they’re okay with that because they believe that future rounds will generate more return on their investment (ROI).

Best Practices

  • Always come prepared with a written, formal agreement when accepting the money
  • When applicable, provide a detailed repayment plan to your donors
  • Determine the investment type: gift, loan, equity
  • Have your product or idea validated before approaching your loved ones for donations
  • Do not ask for more money than a loved one can reasonably afford
  • Focus on loved ones with financial means and knowledge in your business industry
    This is to strategically position you around connections that can be of help long-term
  • Be honest and upfront about your business plan, risks, and expectations
  • The standard ask for a family round is around $25,000 to $150,000 in total
    Expect small and large donations from various family members to reach your total goal

Get Rid of Your Fear of Asking: it’s not easy approaching those you love and care about to ask for money. We want you to realize that if you genuinely believe in your idea so wholeheartedly that you’ll do everything in your power to make it a success, then you’re doing your loved ones a favor. Realize that your success is their success if they’re the first investors. Should your company turn out to be a fast-growing business with a great buyout or ends up publicly traded, your loved ones will thank you for gaining in your profit.

Get Organized and Just Do It: don’t wait for the perfect moment or opportunity to ask your loved ones for money. As soon as you’re prepared to do the asking, just do it. Make a list of all family and friends who you know can afford to invest in your business. Gather their contact information and organize your calendar to ask those who can donate in large and small amounts. Mix in a large ask with a small ask to balance out the fear of failing. Reach out to them confidently, with a mindset that’s determined to fundraise your total goal. You are now a salesperson and you’re selling your future. Your faith rests on how well you convince them that not only are you creating a better future for yourself, but you’re creating one for them too.

 

 

 

What Does Success Look Like to You?

Success in business is defined in many ways. We want all motivated, driven, and ambitious individuals to be successful in everything they do. We want you to really think through what success means and looks like to you – but most importantly, how you plan on achieving it.

Regardless of the type of entrepreneur or “wantrepreneur” you are, it’s important to narrow down what success means to you prior to launching an idea, product, or company.

Here’s how to do so:

  • Write down exactly what you envision to happen professionally
  • Describe specific achievements you hope to accomplish
  • Imagine, in the near and far future, how your accomplishments will be met
  • Identify deal-breakers in the way you operate life so that your accomplishments can be met
  • Envision an “end” goal and create a mental map to reach that goal

Having a personal and business vision plan will help you center and focus your creative and professional energy so that the decisions you make, the opportunities you accept, and the work that you perform are all targeted towards your success.

There are 5 key ways to help you come up with a long-term vision for your success:

  1. Identify the purpose of your business and your target audience
  2. Identify the goals, vision, and values for your business
  3. Create short and long term strategic steps to achieve each goal
  4. Measure, periodically, specific metrics to confirm progress of each goal
  5. Compare your strengths and weaknesses and work to improve your strengths while fixing your weaknesses

As you work towards your success, remember to celebrate every milestone and accomplishment you meet. Build momentum around the positive energy you infuse from your accomplishments.

 

5 Meaningful Ways to Improve Your Online Presence

What It Means to Have a Strong Online Presence

We are asked this all the time,
“how can I increase my online social engagement if I have no idea where to start?”

Here are 5 tips for your business to increase its social media engagement


♦Post Regularly

Social media followers choose to follow your business account(s). The easiest way to show them that you actually care about their follow is to update them with new posts; periodically enough that they don’t wonder if you’ve fallen off the face of the earth but not too frequently that they wonder if you’ve been hacked.

Suggestions on what to post about:

  • Discuss your branding, what it stands for
  • Highlight specific customers (ex: customers with strong brand loyalty)
  • Discuss upcoming events
  • Share promotional materials or access codes
  • Highlight current staff (ex: employees with strong work ethics or achievements)
  • Does your business have any success stories to share?
  • Has your business recently gone through a happy, unexpected moment?

Frequency of post:

  • Post at least once a day in all of your social media accounts
  • A post doesn’t have to be original content
    It can be a re-share of another relevant post
    It can be from another similar company
    Should be relevant to your business
  • Visual posts with good written content are far more appealing

♦♦Engage With Similar Businesses

Competition is a good thing, but too much competition isn’t. One of the most meaningful ways to improve your online presence is by engaging with businesses similar to yours. Partnering or working with similar businesses will give your business an opportunity to see how your competition operates, analyze their customer base, and develop stronger community ties.

Suggestions on how to engage with similar businesses:

  • Collaborate with similar businesses to host or sponsor a community event
  • Help share and advertise a similar business’ upcoming charity or community event
    Event should not directly compete with an event you will have in the near future
    Event should not be held at the same time as an event you plan to have
  • Participate in challenges
    Set up friendly competitions to see which business will raise the most money for a given cause
    Host a sports or health tournament with local businesses

♦♦♦Appreciate Your Customers

Your customers or clients are one of the reasons your business can sustain itself. Don’t take them for granted. Often times, businesses don’t pay enough attention to their customers’ demands and wants. Not every demand or want should be met, but they should at least be heard. Take the time to survey your customers and to receive constructive feedback on products, services, and features on your website or social media accounts that your customers think should be improved.

Spend time greeting, celebrating, and highlighting your customers. Do you track your customers’ birthdays and send them a greeting at the time of month? Do you wish happy holidays to your subscription list in December or January? Do you offer discount codes or referral codes to repeat customers? Those are simple, inexpensive, methods in which you can really make an impact.

♦♦♦♦Update Your Content

Any well updated account is an account that posts frequently enough and shares accurate information. Posting every day to your accounts isn’t enough. You also have to make sure that the content posted is not only relevant to your current status as a business, but also relevant to your customers’ interests.

For example, if you’re planning to host a marathon to raise funds for a charity in December, you most likely don’t only want to speak about the marathon in the coming months. You want to update your followers with marathon information as well as upcoming holidays, projects, and/or events your business will partake in. The key is to focus on the present while advertising for the future. You want your followers to stay interested in what you’re presently working on, but also engaged for what’s to come with your business.

♦♦♦♦♦Keep Up With The Times

We understand that businesses can sometimes be fearful of quick change. We understand that we live in an instantaneous society where the world around us is rapidly evolving. We understand that it can be hard to keep up when you’re just trying to survive. But we also understand that the businesses that sustain themselves long-term are those who constantly innovate with the times.

Keeping up with society as it expands is extremely crucial for your business to grow. Think of your customers, your employees, your founders as individuals of a population that is growing wiser, learning new tools and technologies as the years pass. Now think of your business as the entity that houses all those individuals to provide a product or service to a target population. It’s important to understand that as society advances, so should your business.

Methods to keep up with the times:

  • Stay updated on current online trends via social media or networking platforms
  • Update technology equipment in your offices
  • Update online profiles so that each page is fresh, modernized, and relevant
  • Follow and stay informed with news that pertains to your business operations
  • Re-brand or re-launch a product, idea, or service to better fit your long-term vision