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How to ask friends and family for startup money without making it awkward

Starting a business is an exciting journey, but let’s face it—raising the money to get it off the ground is often one of the toughest parts. For many aspiring entrepreneurs, the natural starting point for funds is close to home: friends and family. But asking loved ones for financial support can feel like walking a fine line between ambition and awkwardness.

So, how do you approach friends and family for business money in a way that respects their financial boundaries while conveying your passion and potential?

Before even thinking about who to ask, make sure you have a clear idea of the financial support you need. According to recent statistics, over 50% of small businesses start with less than $10,000, with friends and family accounting for about 38% of initial capital in these cases. Although there isn’t Rwanda-specific data on this, the trend remains similar in many developing economies.

Be specific. Are you looking for a loan, a gift, or an investment? Knowing the difference is crucial, as each comes with different expectations. If you’re leaning toward a loan, set clear terms on when and how you plan to repay. For an investment, be prepared to explain how they could eventually benefit financially from your success.

Jean Claude Ndayisenga approached his sister for money to start his bakery business. He said he wanted a loan and that he would pay her back. She agreed to give him the loan on one condition.

“I wanted to start my own small bakery in Kigali, but it was tough to gather the capital. I decided to approach my sister with a clear plan for how much I needed and how I’d return it. But she said I first had to give her a plan and show her my product before she agrees,” he said.

If you want to be taken seriously, bring a clear, well-thought-out business plan to the table. Your plan doesn’t have to be a 50-page document, but it should explain what your business does, who it serves, and how it’ll make money.

“She was on board once she saw that I wasn’t just casually asking,” says Ndayisenga, the 27-year-old entrepreneur.

Think about this: according to a Business Insider report, people are 60% more likely to get funded by family and friends if they present a business plan. This shows you’re serious and that you’ve put time and thought into your idea.

Make it short and sweet. A one-pager with a few numbers and clear goals can sometimes be more effective than a thick stack of documents. Be sure to include a timeline so your potential investor knows when they can expect progress.

Finding the right tone can be tricky, especially when asking loved ones. Don’t approach it with a tone that’s too serious or formal, as this could feel like you’re bringing your family into a high-stakes corporate venture. Instead, approach the conversation with sincerity, showing that you’ve thought about how it may impact them.

One way to make the ask feel natural is by approaching the conversation in a casual setting, like over coffee or a relaxed gathering. This helps the discussion feel more like an open conversation than a high-pressure pitch.

“I didn’t want to make it a huge deal, so I casually talked to my sister at a family event. I explained how much I needed, why, and when she could expect her investment back. Keeping it light really helped make the whole thing less awkward,” shares Ndayisenga.

It’s important to remember that your friends and family might not be in a position to help financially. Not everyone will feel comfortable investing in a new business, even if it’s from someone they trust. Statistics show that around 70% of family-funded businesses succeed, but that means there’s still a risk that some do not. It’s essential to let them know that there’s no pressure and that you fully respect their decision if they aren’t able or willing to contribute.

If they say no, don’t take it personally. Respect their response, and let them know they’re always welcome to revisit the conversation in the future.

One way to ease the awkwardness is to give your friends or family an “out.” Phrasing is key. Instead of asking, “Can you help me with money?” try something like, “If you’re in a position to help, I’d be so grateful, but I completely understand if it’s not possible right now.” This lets them know that you understand their position and appreciate them regardless.

Being transparent about what could go wrong can also help. Business is risky, and there’s always the possibility that things won’t go as planned. Sharing both the potential ups and downs makes your pitch more realistic, which will build trust.

Whether or not you get the funding, let your friends and family know how much you appreciate their support, even if it’s just moral support. Starting a business in Rwanda can be challenging, and having loved ones by your side makes the journey easier. Even if they aren’t able to provide financial support, their encouragement and connections could still be invaluable to your business.

“My mom couldn’t lend me the money, but she is the one who told me to ask my sister to invest. It made all the difference,” shares Ndayisenga.

Asking friends and family for money to start a business doesn’t have to be awkward. By approaching with a solid plan, you can ease the tension and make them feel like valued partners rather than mere ATM machines.

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