Before going deeper into this article, it’s important to keep in mind that the definition of entrepreneurs is wide and there are tons of different types of businesses. In this article, we will focus more on tech startups (mobile apps & websites) rather than traditional businesses. Let’s say we’ll focus on business in which a business plan is very difficult to go for, meaning you won’t have an easy time in getting a loan. This article is based on our own experience and we’ll be happy to update it based on your experience. Feel free to share your comments. –


There are very little ideas you can actually develop without investing something at the start. So raising money, even a bit, is something all entrepreneurs will have to go for. In our article, we will explain why we strongly believe that investing your own money without a strict frame around it, is a mistake. We’ll discuss why it’s important to get other people to share the risk with you.

I want to start my business and I need money. What kind of money I can go for?

  1. Personal investment: You can put some of your own savings into your idea. It’s usually the easiest option, as you won’t have to waste too much time in convincing people and will help you keep the focus. It’s a good option to start your Minimum Viable Product or MVP.
  2. Friends & Family: It’s usually a good option to either extend your MVP or scale a bit more. If they see that something is moving, they’ll be more than happy to help you.
  3. Loans & credit: That’s an option very difficult to get for most of the entrepreneurs in the Fintech. It’s also a very risky one as your idea is most likely a very unsafe idea.
  4. Crowdfunding: If you’re ready to go full on it, it’s a good option to raise some money. Be aware that your time investment will be huge if you wanna get any positive results.
  5. Venture capital: Well if you’re not already a successful entrepreneur, the chance you have of raising such money is pretty low.

The first reason you should not invest your own money in your business is that you’re the easiest person to fool.

According to about 82% of the entrepreneurs are self-founded. And only 24% managed to get funds from Friends, Fools & Family (also known as the FFF funds).

It definitely means that this is the easiest option available. So what you should consider before doing it.

Keep in mind that you need to decide how much money you’re willing to invest to test your idea and what results are you expecting with it. Without these limits, you’re more likely to keep investing as you’re always closer to success than yesterday. Meaning it’s a Sisyphean task.

Our main advice after a few bucks will be: decide how much money you’re willing to test to validate the different steps. For ex.

  1. Can I get a MVP ready for X€?
  2. Can I get 100 happy customers with the MVP for X€?
  3. Can I get a team to scale from 100 to N users for X€?

Then for each step, you need to keep in mind that your time is not free. So you can’t consider yourself as a free infinite resource. So you need to validate the maximum amount of time you’re willing to use for each.

It’ll give you your first KPI document.

What I’m testingHow much money can I investHow long to validate the hypothesis
Releasing a working MVP500€1 month
Can I get 100 people to use it800€2 weeks
Can I get a team to scale from 100 to 1000 people1000€1 month
TOTAL2,300€2.5 months

Even though the table could look completely different, the main idea behind it is for you to get a clear KPI or roadmap in front of you. Otherwise, you’re only taking the risk of endless investment (as you’ll always be one step closer to your goal).

Should I invest time to get people to invest with me on my early stage idea?

After running startups for about 10 years, I strongly believe that this is a must. Of course, it’s not always black or white, and you’ll find countless examples of people who did with and without this. But let’s see the full picture.

As we saw in the previous paragraph, you’re the easiest person to fool. Meaning, you can always find a good reason to convince yourself about doing a little bit more. This will be much more difficult when you have to explain why to a few people.

From the previous example, we saw that we need to raise 2,300€. Based on your current savings, it could be something you could definitely do alone. But now let’s say that you decide to finance 50 to 70% yourself and need the rest from friends. A good way of doing so could be to send an email to a list of 100 of the people you consider close asking the following.

Your friend”

“Hello {name}, I’m sorry for disturbing 🙂
I’m currently starting a new project. The idea is to {a few words to explain it}.
To test it I need actually 2,300€
I managed to get 1,500€ from my personal savings and a few friends a good part of it. But I will need a bit more help to close the first budget.
This phase should take about 2.5 months to deliver proper insights about if the idea has potential or not.
Would you agree to invest 500€ or so in the idea?
If you don’t find the idea interesting or don’t wanna join the adventure, feel free to just ignore my email. I won’t bother you again with it. If you do, please let me know how much you could invest with us.
I can’t promise to succeed in it, but I'll promise to deliver the best I can.
In any case, I’ll always love you.
Your friend”

Nothing fancy in the email. It’s only about sharing risk with you. If you manage to invest it a few key points you may keep in mind:

  1. Social proof makes a difference and rare are the people who like to be the first ones in joining a party
  2. This will give you a sense of commitment towards people who invested with you
  3. Don’t be pushy. Ask once and don’t mention it again.
  4. If they agree, make it very simple for them & explain to them what you’ll do with the money
  5. Try to send them a weekly short mail update. It’ll help you keep things organized and will make them feel proud of the investment
  6. At this stage don’t offer equities. You can still promise something out of it, but keep it simple.
  7. You’re on the initial stage idea. So you’re here to build a quick to release MVP. Don’t fool yourself by imagining you’re raising money for the next facebook website
  8. Send this email to people who you know personally, so people don’t confuse it with a ponzy scheme

I don’t have money neither friends to help me with. What other solutions do I have to invest in my idea?

In this case, nothing is lost. But be ready for the ride.

  1. Do a hackathon
  2. Contact the universities around
  3. See if there is any similar project already online
  4. Get a side job the time you collect the needed money
  5. Look for a co-founder with the missing skills in incubators, accelerators, internet …

A few books to consider

So what are your tips to raise money for your ideas? Have you managed to set up a new business this way? How was your experience? Feel free to share in the comments.

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