Raising Capital From Friends and Family Part 2: Exhibit Confidence and be Prepared!

Raising Capital From Friends and Family Part 2: Exhibit Confidence and be Prepared!

One absolute when dealing with friends and family is to not come across as if you are fearful. No one is going to invest in someone who is afraid of the opposition. More than anything else, friends and family know you best and need to see that the business they are investing in is led by someone who has confidence. In order for them to believe in you, they need to see your enthusiasm and confidence. Some ways to build up your confidence:

–          Have your homework done before you go to meet them and ask yourself what you would be looking for if you were in their shoes

–          Practice discussing your idea in the mirror so you can see how you look, make sure you look motivated, excited, and experienced in the field you are discussing

–          Be prepared with what you are willing to take on the high side, and what you are initially asking for by way of interest, percentages, etc.

–          Avoid big talk or discussing things you do not know, focus on what you do know and how you are going to use the money

–          Bring a loan document, showing how the payment schedule will work in the event you are asking for a loan

–          Be ready to accept refusals and practice accepting people saying no

–          Practice some objection handling, such as, can they lend a portion, or something that would make giving a loan more possible? Maybe even ask for a referral for someone else in the worse case its clear they cannot lend any money. Practice how you would ask these questions in the mirror or possibly with a significant other or business partner so that you know you are ready to ask for funds. If you know some of the objections friends or family may already have, try to prepare for those, and come up with ways to handle the objections before meeting with them

In most cases, the availability of a loan document is often enough to secure confidence along with your relationship with the lender. In order to document a loan, you will want to go to www.documentyourloan.com