I was on the phone today with a buddy of mine that did pretty good during the .com bubble, and we were talking about somethings including my frustration in the pace of some things that have been happening lately. This is one of the few times in my life that I wish I had a lawyer in the family. I mentioned jokingly what we could do if we had enough bankroll to quit the day job and hire some people.
He shocked me, and said sounds good let me write you a check. Over the past 3-4 months I have had some good friends tell me the same thing, but I am that stage in my life where good friends are hard to come by, and I really get this queasy feeling in the bottom of my stomach when someone is potentially holding out a check with a significant amount of their savings attached to it. I am quite confident in what we are doing but getting money from bank is one thing and getting money from friends is another.
I think I would have nightmares worrying about their investment. If something happened I would feel guilty forever. I am sure some of you have been down that road. How have you handled it?
I agree. Take the friendship out of it and treat it the same just like any other business relationship, but since they are friends explain why right from the beginning. The two are seperate, so keep business business, and friendship, friendship, and then you will run into less hassles down the road, and most likely not damage the friendships.
I agree with tack…let this person loan you the money, but for the sake of your friendship, have a formal agreement in which you agree that you will pay him back if anything should happen. Your friend wants to see you succeed (and we, meaning your listeners do too). Your friend wants to give you an opportunity. I say go for it, but for the sake of your friendship (it will also make you feel a whole lot better about the whole situation) get it in writing. I am a Senior at the University of South Carolina majoring in business management and this is one of the first things that we learned – if you take money from a friend be sure to get it in writing and make an agreement. Well, there goes my 2 cents so now you have a total of four cents. Take it for what its worth and keep up the great work!
-Andrew
Difficult issue ……
The ONLY way to do this – if you do it at all – is with a FORMAL business arrangement. He is INVESTING in your expertise and should see it as a business venture – for BOTH your protection. You need a structured business plan with goals and breakout points ( when to cut and run / accept your losses and quit) and ideally a feasability study to see if it is a potentially sensible idea in the first place! ONLY after all that is done should either of you go ahead…!!!
Doing it any other way will only lead to incredible stress and potential loss of friendship..
my 2 cents worth!