Family and Friends
Obtaining money from friends and family can prove to a double-edged sword for a number of reasons. On the positive side, friends and family trust you. Often this is a liability for the very same reason.
For instance, if a trusting family member is kind enough to lend you a five-figure check to start your business, keep in mind that it could end very badly, especially if that individual is not completely fine with losing the money.
Of course you should warn them of the risks and do you best not to squander their resources, but business will always holds inherent risks.
The latest Jumpstart Our Business Startups (JOBS Act) that went through Congress and was signed by President Obama may help entrepreneurs expand beyond Kickstarter campaigns. There are certainly provisions of the law that are yet-to-be-released which will shed more light on the “how-to’s.”
However, the initial announcement of the law has been well received, despite the increased potential for investment and investment advisory fraud. It still represents a means to the end: funding your business without having to pitch to high-flying venture capitalists.
Being creative is often what separates successes and failures in business transactions.
Your company’s success may yet hinge on how well you are able creatively tackle tough issues. And because the financing of projects can be extremely difficult, you will often need as much creativity as you can get in order to pull it off effectively.
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Photo: Ann Taylor
Jon Castano is a retirement account advisor and online marketing specialist for Silverstone, an investment management, IRA & 401(k) firm located in Seattle, WA and Austin, TX.
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