How Do I Pitch Friends and Family for Money?

There it is:

That super awkward moment when we're about to turn the conversation with our rich Uncle Mortimer from "Well it's been great catching up on my new startup" to "Hey would you mind investing some of your hard-earned money into this venture?"

So how do we ask friends and family for money without it getting totally weird?

Is there a way to "pitch" that doesn't leave both sides feeling uncomfortable every Thanksgiving?

It's not what we ask, it's how we ask

There are lots of different ways to ask for money, and most of them are really awful.

What we want to do is position the ask in a way that makes it clear we're asking for money, but also clear that it's not more important than the relationship.

Look for buying clues first

Before we ask for money, we have to make sure there's some level of interest in the venture at all.

We can do this by asking if the person we're talking to would have any interest whatsoever being involved at any level whatsoever.

We can begin by getting the sense for whether they want to be an Advisor, which could lead to an investor later. We're looking for some indication that they are willing to spend time and resources toward this venture.

If they don't seem to be leaning in at any point, asking for a bunch of money is definitely not the right closing move!

Leave room for a polite exit

Good ol' Uncle Mortimer is going to be far more freaked out if we try to box him in with our ask.

If we say "Will you please invest $25K in our startup?" then we're forcing an immediate, "yes" or "no" answer. That's not a problem if the answer is a resounding "YES!" But let's face it, it's probably not that.

That's where our challenge comes in.

Instead, let's give him an out. Let's ask "We're raising $25K for our startup. We'd love to see if you or anyone you know might be interested in getting involved at some point."

In that simple sentence, we just gave Mortimer a chance to say "No" to being an investor but offer some help on where he might be able to point us elsewhere.

By leaving the time frame in which we hope to secure the investment more open-ended ("at some point"), we're not forcing him to pull out his checkbook immediately.

In Case You Missed It

How to Mix a Family and a Startup. Given that our time is so scarce, what can we do to be best prepared to be a good spouse and parent while also being the best Founder we can be?

3 Red Flags to Avoid When Pitching Investors. Investors sift through dozens of deals a week. In order to find the gold, they need to quickly weed out the junk. The junk usually involves startups with any one of three red flags that deems the deal a “pass.”

8 Tips for Elevator Pitches That Work. Members of FoundersSociety — an invitation-only organization comprised of ambitious Founders and business owners — offer their best tips for putting together a one-sentence elevator pitch.