Is it financially wise to fund a seed stage with borrowed money, whether from a bank or an individual?
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Is it financially wise to fund a seed stage with borrowed money, whether from a bank or an individual?
Most startups are funded by personal loans and savings. However, I think crowdfunding is a great option for several reasons. I am a firm believer that anyone can raise good amount of money using crowdfunding with the right tools. Also it makes it so much easier to ask friends and family for money. Instead of coming to them with just an idea you have an online presence, a pitch, a platform that they can share it. Not to mention it makes asking total strangers for money perfectly okay.
Your first seed money is mostly from friends and family that believe in you or your idea, or company. If your friends and family invests with your company, just understand that this can either be a positive thing, or a bad thing. There will be a few that believe in you, but you are going to have to put up with all the negative issues before you start seeing recurring cash flow. Everyone will have expectations that you’re going to turn this into Millions of dollars in the first year. That’s not how this works.