What are the pros and cons for starting a business with family?
Starting a business with your family members and friends can be exciting and full of advantages. It can also bring extra stress and potential problems down the road. Is it for you?
Keep reading to find out the real perks and disadvantages and why you should and shouldn’t do it.
The Pros Of Starting A Business With Family
There are many advantages to this strategy. Here are just some of them.
1) Companions You Know On The Journey
Picking partners and cofounders is always a precipitous decision for entrepreneurs. Often the biggest risks come from getting into a business marriage with someone you don’t know that well.
Someone you haven’t lived with for years and really understand in terms of how they react under pressure, their real goals and values and talents.
Many startup entrepreneurs do end up moving in and sharing an apartment and meager meals together for years. You never really know if you are going to get a bride or groomzilla until after the honeymoon wears off.
The benefit of launching with family is that you already know them very well which is a critical factor when evaluating the pros and cons for starting a business with family. The good, bad and ugly. You know what drives them, what they are good at and how to get along.
This enables to you pick great companions to take the journey with you. This can make all the difference in how long you can hang in there.
As one of my recent guests on the Dealmakers Podcast put it, the best cofounders are those who make the highs twice as high, and the lows only half as low.
2) You Want Them To Benefit Financially When You Do
Naturally, you want your family to benefit financially as you are growing your startup and making millions of dollars.
It’s even better when they are putting in the work with you instead of just asking for handouts solely on the back of your hard work and risk.
3) Show Them What’s Possible
It’s ironic how entrepreneurs frequently doubt themselves when it comes to launching a startup of their own. Yet, they would encourage their friends and family members to go for it.
The thing is, words are cheap. People follow the example of what you do. Not what you say. So, if you want to inspire your family or friends to what’s possible, bring them along on your journey. That may be siblings, kids or even your parents.
4) Access To Capital
Friends and family should always be your first stop on the startup fundraising circuit. Otherwise, other potential investors are going to want to know why no one else you know or are related to believe in you enough to help finance you.
See How I Can Help You With Your Fundraising Efforts
- Fundraising Process : get guidance from A to Z.
- Materials : our team creates epic pitch decks and financial models
- Investor Access : connect with the right investors for your business and close them