Get Your Business Funded: Creative Methods for Getting the Money You Need

The Good News

As you begin to think about finding funding from a loved one, consider the relative positions you are both in.

What's in it for you? Of course the obvious answer is money. Being able to get the money you need from a loved one is a blessing. You are blessed that someone loves you so much that they are willing to take a risk on you, and that they believe in what you are doing.

Yes, those are good things, but interestingly, I would also venture that if most small businesspeople had their druthers, they would prefer not to take out a loan from the bank of mom and dad. Yes, great terms are wonderful, but anyone sophisticated enough to start or run a business knows that money always comes with strings attached, either implied or expressed. When people invest in you, you owe them not only money, but answers. Why are you doing that? Why don't you do this? Why aren't you selling more? Seemingly innocent questions may not seem so innocent anymore.

So what's in it for you is a double-edged sword. You may get the money you so desperately need, but it will come at some price to your autonomy and relationship.

One way to structure the deal is as a limited partnership. In that sort of arrangement, the limited partner is essentially a passive investor and has no legal say in the day-to-day operations of the business.

What's in it for them? They love you, that's what! They want to help you, help you dream, and help you get ahead. That they may make a little money on the deal is ...