Friends and Family Make Good Business Partners

Posted by: Rod Kurtz on February 14, 2007

Most startup companies receive the bulk of their seed capital from friends and family (F&F). The best way to make this type of funding work for you is to put all the risks and opportunities in front of your potential F&F investors and have them help you create a healthy, profitable business. Your friends and family may want to be passive, but if they request to be active, find a way to involve them that is beneficial to all, including the business. When your F&F investors participate actively in your business, consider incorporating the business with them as founding stockholders.

Marilyn Holt, CMC
CEO
Holt Capital
Seattle

Reader Comments

susan johnston

July 10, 2008 3:13 PM

It is Hard to be in Business with a Friend!

I just wrote the words,"Kim Webb was a tremendous help in taking the story of Princess Bubble from an email Susan originally sent out to her friends to a beautifully published book. Her friendship is extraordinary and priceless to Susan! But, sometimes it is hard to be best friends and business partners so Susan has bought Kim's interest in Bubble Gum Press and will always be grateful to Kim for her love and passion for the message of Princess Bubble!" on our site www.PrincessBubble.com

As I was writing those words I was grieving the loss of my business partner. But, I know I still have the dearest friend anyone in the world could ever ask for!

It is just HARD to be business partners and friends. Here is a little of our story in case this can help anyone else and probably mainly to vent my grief since I am not really telling this story to the one I tell everything to-my best friend/ex-business partner.

I wrote the story of Princess Bubble and Kim thought the story was missing and needed to be told to the world. Having always been the most attention deficit person in the world; I said "Join me so it will get done!" What I did not realize about myself was I am the Queen of Attention Retention when I have a passion. I guess up until Princess Bubble I never really worked on anything that I thought could change, empower, encourage people/girls the way I feel about the message of Princess Bubble. Having a passion that burns like a wildfire makes you excited every minute of everyday to work on something this powerful.

Kim, also passionate about the message, became the A.D.D. one in our partnership which is totally unexpected because she is brilliantly focused and taught herself Spanish, Portuguese and Italian!

My background prepared me more for this project. My family has always owned a retail/wholesale business and I started buying for our store as a tween. I majored in public relations and understood the value of the media.

We both made a million mistakes a long the way and knew absolutely nothing about publishing-so we have been blessed beyond measure. But, I saw early some of Kim's mistakes in the few areas I knew something about. Then this weird control freak person came out in me that has been hiding under a blanket of apathy my whole life. I had learned to sell/promote my family's wholesale line as a child; therefore I assumed that ANYONE would know the basic I knew! Turns out they don't.

Then the miracle of all miracles happen! We were asked to be on The TODAY Show! But, Kim said she only had limited availability. LIMITED AVAILABILTY! We are unknown, self published authors. In my mind if I was getting married that day I would have canceled the wedding to be on the show! Plus, my father had just suddenly died and I was crushed beyond measure. The good news of The Today Show was this fantastic thing I could focus on through my tears and pain.

The show was kind enough to work with us and we appeared in a segment with Ann Curry. But, ever since then our business relationship has been strained with our different views of work and commitment.

Thank God we have a friendship that is sibling like in nature; where despite the fights you adore the person so much that I can fight, fight, fight and then say, "What cha wanna do tonight?"

Our new personal story reads, "Once upon a time there were two princess. The two princesses realized their kingdom was crumbling with both of them ruling. But, they knew as friends they would live "Happily Ever After" forever! And they will!

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