For many young entrepreneurs, getting their parents’ support for a new venture can make a huge difference – emotionally, practically and even financially. But it’s not always easy to explain to Mom and Dad why, instead of getting a “real job,” you’re putting everything on the line to create a new technology startup. It can be done, though, and these youthful startup veterans explain how:
Tip #1: Don’t get too full of yourself. “Show your parents that you have thought [your idea] through to the long term, not just what you hope happens in six months,” says Kelsey Meyer, Vice President of Digital Talent Agents. “Also, do not try to compare yourself to Facebook, Twitter or Instagram – those are the exceptions, not the rule, and parents know it.”
Tip #2: Do your homework. Scott Thompson left a comfortable career with a good salary and excellent health benefits to start a business 5,000 miles from home as part of the entrepreneurship program Start-Up Chile. “After their initial reaction of shock, sadness and worry, they quickly came around to being the #1 fans of my startup, Bungolow.com,” Thompson says. His parents provided expertise in graphic design, including helping design the company’s first logo. “Their support was influenced not only by unconditional love, but also the fact that it was clear I had done my homework, and that it was not just a spur-of-the-moment decision,” says Thompson. “I was thorough in explaining why I wanted to do it, and why this was the time to do it.”
Tip #3: See their perspective. “Until my third year of being self-employed, my parents – who are baby boomers – thought I was out of my mind,” says Faiyaz Farouk, whose company, S2 Leadership Consultants, advises businesses on working with Gen X and Gen Y employees. The strategy that won them over? “Understand and respect where they are coming from,” advises Farouk. “Use their values, and talk from their perspective, without losing your ground on your decision.”
Tip #4: Keep them in the loop. The concept for Eric Dresdale’s startup, a prepaid debit card launching in July, is all about seeking support from your family. “I wouldn’t have been able to launch this business without the help of my parents,” says Dresdale, Managing Member of Next Step Network. “They have supported the idea financially and emotionally from its inception.” Garnering their support required clearly outlining the business plan to them as if they weren’t parents, but investors. “I also keep them apprised weekly of headway being made with clients.”
Tip #5: Convince them of your passion. “My parents are in their mid-60s, and I believe with age comes an appreciation for life,” says Aron Susman, cofounder of TheSquareFoot, a site that helps small businesses find office space. “Even though I had spent five years at school to obtain my degrees, and my parents had sacrificed financially to make that happen, they knew that life is about the journey. They saw the passion I had for becoming an entrepreneur and wanted to support me in any way possible.”
Tip #6: Be completely honest. Seeing the hard work and dedication, Susman’s parents invested in TheSquareFoot about a year after the business began development. “Getting investment from family can change things very quickly,” Susman warns. “Make sure you have a strong enough relationship that this will not put on undue pressure. You must have ultimate trust between each other and talk through all the risks. Make sure they understand there’s a chance the investment won’t pan out. Lastly, make sure losing the money won’t impact their livelihoods or retirement.”
Tip #7: Show them what you bring to the table. When Wade Benz launched USimprints.com, an online provider of branded promotional products and imprinted giveaways, his parents not only let him live at home, but also let him work out of their basement, helped him with packing and shipping, and even financed most of the initial startup costs.
What convinced Benz’s dad, who had decades of experience in the industry, that his son could make a go of it? “He saw that I brought valuable qualities to the table,” says Benz. “My dad brought knowledge of our industry, initial contacts with vendors, some early customers and overall maturity. I brought a fresh perspective on the industry, forward thinking about where it was headed and an overall knowledge of technology, e-commerce and Internet marketing.” A year after launch, Benz’s father joined the company full time.
Tip #8: Explain your idea on their terms. “You have to instill confidence in them, not only that your idea is a good one, but also that you are capable of actually creating it, and convincing people to use it,” says Tashfeen Ekram, whose startup, SchedFull.com, helps physicians and other professionals fill cancelled appointments. “Selling it to them on their own terms is key. I had to explain the usefulness of the product from my father’s standpoint. We are trying to reduce wait times for doctors, and when he realized it could save him time and allow him to see his doctor sooner, he was sold [on its usefulness].”
Tip #9: Don’t gloss over potential problems. Ekram’s father is currently running his own startup, and has started other businesses in the past. This made winning parental support both easier – and harder – for Ekram. “My dad understood what it takes to be successful, and he knows that most startups fail, so I really needed to know what I was talking about,” says Ekram. When dealing with your parents, there’s no place to hide: “They know you very well,” says Ekram, “so you have to be honest about your shortcomings, where you might go wrong or potential problems in the business. My dad appreciated that, because someone who doesn’t have a good grasp of his shortcomings can never address them, and thus won’t realize when he is about to fail.”
Lead image courtesy of Shutterstock.