Friends and Family Funding


Start where you are

One place that many entrepreneurs start is with friends and family. Although it can sound awkward, many, if not most, entrepreneurs start out with small investments from the people and finances already in their lives. Personal assets and investments by family and friends provide a major share of financing — an average of 20 percent to 30 percent of all funds — for business start-ups.

Iowa SourceLink  offers a very helpful guide and some questions to consider for entrepreneurs as they are starting out to fund their business with money from friends and family.

You, your family and friends are the stars of this stage. Think about your personal savings, a home equity loan, borrowing against your insurance policy as a start in consultation with a financial professional.

The following articles give some timely tips on using personal resources to fund your business.




A modern technological evolution of friends and family funding is Crowdfunding. In Crowdfunding, various online platforms offer the opportunity bring together various individuals who commit small amounts of money to projects and entities they want to support. The Securities and Exchange Commission (SEC) has rules about what can and can’t be done through crowdfunding platforms.  It is imperative that you ensure that you are working with reputable entity if you are considering a crowdfunding method for your business. Additionally, each platform works a little different so be sure to “read the fine print” on each site you would consider as your crowd funding base.