When a family member invested in her business last year, Leah Eichler spent three days walking around with the cheque in her purse before she could bring herself to bank it.
“I had to come to the realization that I am as good as they think I am,” said Ms. Eichler, a Globe and Mail columnist and creator of Femme-O-Nomics, a digital networking tool for professional women. “And when I realized that I wasn’t going to fail them, I was comfortable taking their money.”
Ms. Eichler’s cautious attitude is a wise one, experts say.
Most entrepreneurs feel tremendous responsibility to people who invest money in their dreams, and that’s amplified when it’s friends and family.
“It’s an incredible amount of pressure,” said Patrick Keefe, vice-president of investment at Halifax-based Innovacorp.
A lot of Canadians nurturing new businesses are feeling that pressure. When it comes to informal-source financing for start-ups, venture capital from family and friends is key. It accounts for 80 per cent of the $10-billion invested in them annually, says Allan Riding, Deloitte professor at the University of Ottawa’s Telfer School of Management.
To read the full article – Toronto a hot spot for entrepreneurs who borrow from loved ones – Augusta Dwyer – The Globe and Mail – June 27, 2012