Deciding On Whom To Ask For Funding

After initially investing personal funds for a new business vture, trepreurs
will oft resort to their next option for raising capital, namely their family
and . However, this may not be as easy as it sounds. An trepreur
seeking startup funding
cannot simply ask their family members and
for large amounts of money. Instead, the correct way of going about asking for startup funding is by developing
a business proposal and presting it to the family members and whom they
are ning to ask. By being d in this manner, the trepreur will be
able to gain credibility from others and show just how serious they truly are about
their business ideas.

a list
Most trepreurs initially believe they do not have many family and to
ask for startup funding. However,
once they compile a list of all relates and , they will be able to see
that they actually know more people than they had initially thought.

At this stage, the
entrepreneur
should not limit the list to those that s/he thinks
will be the most likely indiduals to invest capital in the new business. Therefore,
they should brainstorm with close family and on devising a list themselves.
This list should include the names of acquaintances and they can think of
in the prest and past. By creating a list and asking others to make one as well,
the trepreur will increase the number of contacts who could be
potential sources of funding
.

Organization of the list
In the list of names, the “inner circle” should include those with whom the
entrepreneur

has the closest relationship. This can comprise of parts, in-laws, uncles, aunts,
grandparts, and best .

The middle tier should consist of people with whom the
entrepreneur
has had a bit
more distant relationship with but whom they have regular association with. The
“middle circle” of acquaintances can be neighbors, delery people, attorneys, and
of .

The outer layer of the circle should include names of people that the trepreur
has not kept in touch with over the past few years but has shared a close relationship
at one time with the
entrepreneur
. These people can be past business partners and
associates with whom they still have a good standing relationship with.

Narrowing the list
Once a list is compiled, the next step in apprching family and for capital
resources is to narrow the list. The need to narrow a list is necessary since it
will only include people whom the entrepreneur knows have the proper finances to
make such an investmt. Each name should be weighed according to the person’s accountability
since it would be pointless to ask indiduals who have no money or who are distant
in relationship to the trepreur. The confined list should comprise only of the
indiduals whom the
entrepreneur trusts
well and is responsible ough with providing
the necessary funding for the new business.

Sd out a letter
Once the names have be short listed, the trepreur needs to formally go about
the request for funding. One
way of asking for funding is by devising a letter that describes the new business
proposal. This letter should th be st out to family and through direct
mail. By taking the time out to write a letter describing the business proposal
and asking for financial support, the prospecte business owner makes a more personable
and professional funding appeal to his/her loved ones.

Follow-up
Once a letter to family and has be mailed out, the prospecte business
owner should follow-up with everyone they have asked. This can be done via telephone,
e-mail, and ev through post cards. For those who are interested, entrepreneurs
need to sd out a more detailed business proposal and a financial agreemt that
promises to pay back the amount owed. The latter is extremely for family
members and because it is a contract betwe all parties involved on how
and wh the borrowed money will be returned.

If an entrepreneur follows these rather easy steps, th asking their family members
and for up funding can be an organized and easier process than one
may have initially thought.

Conclusion
Wh asking family and for funding, an
entrepreneur
should follow some steps
in order to make the process easier for all parties involved. First, they should
compile a list of all possible contacts with whom they could possibly ask for business
capital. Once the list is refined, a formal business proposal should be mailed out
to each contact and followed up soon after. For those parties who are interested
in financially supporting their loved one, a contract should be made regarding the
entrepreneur’s intt to pay back the borrowed money.

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