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Which is better build a business on your own or get your friends to invest?

Discussion in 'General Business' started by Hannah Threst, Jun 12, 2019.

  1. #1
    Here's a scenario, you want to build a business but you don't have enough capital to start it on your own. You have friends that can help you in terms of money matters. But the problem is they have no passion or idea on what kind of business you want to build.
    Is it better to just load money to get started or ask for your friends to help you with it. Any suggestions on what's the best option to do this?
    SEMrush
     
    Hannah Threst, Jun 12, 2019 IP
    SEMrush
  2. jrbiz

    jrbiz Illustrious Member

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    #2
    A good way to lose friends is to get them to invest in a business based on friendship alone and then have that business fail. At that point, you will have no business and no friends. And, remember, 80-90% of new businesses fail so it is always a risky investment. I don't know what you mean by "load money" but if you can bootstrap your business on your own, without outside investment, it would be best.
     
    jrbiz, Jun 13, 2019 IP
  3. dcristo

    dcristo Illustrious Member

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    #3
    Do you have a history of building profitable businesses? You know most fail?

    As a "friend" I'm not sure how you could ask friends to invest in your business when you don't even know it will be profitable.

    IMO you should never mix family/friends and business.
     
    dcristo, Jun 13, 2019 IP
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  4. NetStar

    NetStar Notable Member

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    #4
    Here's a dose of reality: Your friends will say they are super supportive of you and your ideas but when it comes to participating or investing you will quickly find out how uninterested they really are. Your friends will not financially support or even physically support your random ideas. They won't even support you when you have an operating business. However, once you become profitable and successful they will all want to support you in a way that benefits them and not you. That's business.... the only person you need to believe in you is yourself. Your friends will probably not be helpful. Build your business yourself. If it's money you lack then you may have to approach your business from a different angle or start much small than you originally anticipated.

    If you happen to have some crazy friends who will throw money at you. Don't accept. Their expectation of return and benefit will never align with a start up business model or your expectations.
     
    NetStar, Jun 15, 2019 IP
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  5. Hannah Threst

    Hannah Threst Banned

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    #5
    I meant "loan" money from the bank.
     
    Hannah Threst, Jun 21, 2019 at 12:00 AM IP
  6. jrbiz

    jrbiz Illustrious Member

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    #6
    Banks will not loan a new business money unless you have collateral to put up against the loan. And, of course, you will have to pay it back with interest or lose the collateral. If the business fails, you will not only lose the business, but your collateral, as well. Be sure that you are ready for such potential consequences before you take out such a loan.
     
    jrbiz, Jun 21, 2019 at 7:21 AM IP
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  7. Spoiltdiva

    Spoiltdiva Prominent Member

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    #7
    And of course their credit rating would be shot.
     
    Spoiltdiva, Jun 21, 2019 at 7:26 AM IP
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  8. Bridget65

    Bridget65 Member

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    #8
    I think it is better to build a business online on your own. Because you know what your business needs to be grow.
     
    Bridget65, Jun 21, 2019 at 10:58 AM IP
  9. Hannah Threst

    Hannah Threst Banned

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    #9
    Thank you all for the feedback!
     
    Hannah Threst, Jun 21, 2019 at 6:12 PM IP
  10. jrbiz

    jrbiz Illustrious Member

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    #10
    Well, at least you got a "thank you" in before being banned. :rolleyes:
     
    jrbiz, Jun 22, 2019 at 3:49 AM IP
  11. Spoiltdiva

    Spoiltdiva Prominent Member

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    #11
    And as if all this is not enough, she gets banned! Sometimes it just doesn't pay to get out of bed.:(
     
    Spoiltdiva, Jun 22, 2019 at 5:29 AM IP
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  12. jrbiz

    jrbiz Illustrious Member

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    #12
    Certainly not an auspicious start to her business launch. :eek:
     
    jrbiz, Jun 22, 2019 at 8:44 AM IP