Use Friends and Family $ to Fund Your Entrepreneurial Venture
In the April edition of Kiplinger's Personal Finance there is an excellent article "Take a Flier on a Friend" by Anne Kates Smith. The article discussed the importance of "friends and family" funds to start small entrepreneurial efforts.
The article mentions that $100 billion "friends and family" money is used annually to fund 3 million start ups. This compares to only $25 billion through venture capitalists. The average amount invested by friends and family is between $20,000 and $25,000, and further, 58% of the fastest-growing companies in the U.S. started with $20,000 or less.
This data would appear to support adequate funding to start microbusinesses in the region, and less emphasis on VC monies.
Cameron Johnson argues for entrepreneurs to start small. With friends and family money, you can do just that.
In fact, Prosper.com is a site connecting small investors to entrepreneurs just starting out.
With the costs of entry so small now to start your business and adequate friends and family monies available with the wealth transfer between generations, now is the time to start your business in the region.
We used Friends and Family to help get us going; then we went to Angel investors once it was time to accelerate the growth of our already proven model.
Posted by: Pat | March 10, 2007 at 04:14 PM