How to Raise Money from Friends and Family (TFM 5)

So let's talk about the subject of family and friends, and this is a subject that a lot of people want to avoid. This is the one thing they don't want to hear. A lot of times they're like, oh, no, of course, family and friends. I mean, give me a break. Everybody knows you could borrow money from family and friends, but that's the hardest, okay?

So what I would like to do, Arthur, is let's go back and forth on this. Let's hit it from a different angle, okay? Let's make this a little bit unique. Rather, I want everybody listening to get this thought. I want this thought to get out of your head, okay?

Of course you could just go to your family and friends and ask to borrow money, okay? Of course you already thought of that. Of course many of you have already tried that. So we're not really going to talk about that. What we want to do is we want to help you come up with some ideas or some different perspectives that you didn't think about with it.

Because, first of all, like the perspective of what does family and friends really mean? Really, the term family and friends. Family and friends could actually mean people who know you, like you, and trust you. Anybody where there's some trust already built up, okay? Anybody where people already know you so they're more likely to do business.

I mean, even on some of the stuff we've already mentioned before, some of these creative ideas and odd jobs and brokering and different things. I mean, if you were to go to a friend or family member and do some of these odd jobs or brokering things, they would be more likely to do it than you would with a stranger. So when we say friends and family, we don't... We don't just mean hit up everybody you know for a loan. We mean everything.

All of these different ideas, if you get the right proposition to them, if you get the right pitch, somebody who already knows you, likes you, and trusts you is going to be far more willing to do business than some stranger. The stranger might, but the person that already knows you is far more willing. So, Arthur, let's talk for a minute. I'll let you kick it off. Let's touch up on the idea of the family and friends market and what are some different unique ways to be able to approach that and be able to do business.

And be able to raise some capital through people that we already know. You know, it's just that, you know, the first thing is, I think, is just making the decision that you're going to do it and that you're going to go for it, regardless of, you know, some of the criticism or some of the judgment that you might have. I think that, you know, just making the decision. I think making a decision in anything is the most important thing. You know, it's kind of like joining the Power Network.

The very first thing you do is you make a decision that you're going to do it. You know, you make a commitment. You make a decision. You just... You decide that you're going to go all in the business.

And it doesn't mean just, like, from the money perspective, but it means from the mindset, the attitude, your activities, your actions, all the things that you're putting into your mind, body, and soul. You make that decision first, and then you, you know, go out there and start doing it. And I think that once you make the decision, you start making a list. You know, we talked about this with odd jobs. It's like making a list of all the entrepreneurs, you know, all the people you know that are designers, all the people that own companies, all the people that are in business of some kind, all the people that are, you know, you know, bankers or in finance or in marketing or in sales.

And, you know, again, you know, making a list of really your warm market of people you know that you can broker deals with. But also, I mean, you know, going to those people and just being real with them. Like, hey, you know, we might have not connected in a long time, but, you know, I'm getting started in a business. I'm looking to, you know, I'm looking to raise some capital for my business. And, you know, you can hit it, Chris, from a couple different angles.

So let's say you're, like, brokering a deal or something. You can tell them, like, you know, you have a couple services that you offer. But a lot of times, like, those people that are most business-minded, they will ask you, well, tell me about the business. You know, they'll ask you about the business even though you're offering a service because they'll see the conviction that you have about raising the money and raising the capital. And that all comes from making that decision first and being committed and having that conviction, that look in your eyes.

The thing that we saw at the, you know, the last. The last event that we were at just recently is, you know, having that conviction, having that look in your eyes like you're serious, like you're committed, like you're devoted to this project and this business. Does that make sense, Chris? Does that make sense? Yeah, absolutely.

And that also ties into the initial, which is the mindset, having the right mindset and the proper belief. Because if you have a poor mindset, which a lot of people do, unfortunately, and a poor mindset is what keeps them poor. But a poor mindset is that people don't. Don't want to talk to friends and family versus a rich mindset is I'm going to do whatever it takes to succeed. You know what I mean?

Like, like, take, take any business I've ever started. I've never needed to contact friends and family because I would have been completely successful without ever contacting friends and family. Okay. Because I was driven to be successful. But part of what drives me is that I'm willing to do whatever it takes.

So at the same time, I never needed to contact any friends and family. But at the same time, I was fully willing to contact any friends and family. Because. Just if I allowed for even a split second, the idea to cross my head, like, oh, no, I don't want to talk to them. I'm worried about what they think of me.

What if they said no? What would this mean? If I allow that kind of doubt to creep into my mind, if I allow that kind of mindset to come in, that mindset in general is really, really, really bad for your financial health. It's a bad mindset. Okay.

You should believe in what you do. You should believe in yourself. You should believe that you're a good investment. You should believe that no matter who you share with, a friend or family or anybody, it doesn't matter. That you're a good investment.

And so you should be confident to talk to anybody. So I 100% agree with that. And Chris, I mean, like, you know, if you were to go to a friend or a family member and you were to say, hey, you know, I'm thinking of maybe possibly one day, hopefully, potentially starting a business. And I'm looking to raise some capital. You think the person would want to invest in you if you had that type of attitude in your words and what you're speaking and your tone?

You're kind of down about it. And I'm thinking maybe possibly one day soon I want to start this business. I'm trying to raise some money. And you're kind of talking really low. They're not going to want to invest in anything that you're doing, whether it's brokering a deal or helping you raise some money.

But you come in there and you're confident. You're like, I'm getting involved in this business. I just met some incredible people I've been working with. And you just, you know, you tell them some of the stories, some of the people that are involved and, you know, what you're going to do. And it's not some far-fetched out-there story that nobody's going to believe, but it's the confidence and it's the, you know, the conviction that you have that will, you know, people will, people that know, like, and trust you.

We'll listen to you. Yeah, absolutely. So let's talk about this a little bit. Let's dive into this. This is going to be some fun, okay?

So when working with friends and family to be able to raise capital, let me ask you a question. Here's what I want everybody to do. Think of somebody right now in your family or friend, a close friend or family member, that could potentially invest in you, like they actually might have the money, okay? Somebody who might have the money if they saw the vision, okay? Now, what I want you to do is I want you to think about sitting across the table.

Sitting across from them and pitching them on the idea and whether or not they invest. Just visualize yourself sitting across from them, sharing them this idea, and whatever outcome comes in your mind. I don't even want to tell you what outcome to think of. Just think of it in your mind. Some of you might be thinking about them getting excited and investing in you.

Some of you might think about them laughing at you and thinking it's funny. Some of you might think that they'll try to talk you out of your business and you're scared to approach them. There's probably all different types of thoughts. But keep that vision. Imagine you're sitting across somebody pitching them.

Now, imagine instead of you, imagine it was me. Imagine I was sitting across that family member and I was pitching them on an investment opportunity to be able to fund something that I was doing. And imagine that I was speaking with them. And imagine I was sharing with them, you know, what we do, why we believe it's a fantastic return on their investment, what safeguards we have in place, what we plan on doing, showing them some results and some track record. Imagine I was sitting there and I was saying, my question is this, do you believe the percentage, the odds and the chance of success goes up if I'm sitting across from them and I'm pitching them?

So for those of you that said, yeah, you think, well, man, if Chris Record was right there sitting across and I'm pitching them, it would go up. Well, I'll tell you, the only real difference, the only real, real difference is the mindset. See, I close business and I raise capital because I absolutely believe 100%. That, that I can do it. I don't look at it as being something difficult.

I sit right across from somebody. I tell them straightforward what we do. I have, I radiate confidence and belief. I share with them some success stories that are in our community and what happened. Share with them some advertising ideas and say, look, you know, let's play together.

Let's, let's do this. Let's figure out a way to create a win-win. Let's figure out something. And I walk away with money, with a deal or with some funding, with whatever. Right.

So, so if you could just. Get more confident when you're sitting across from people, it's going to help. So here, here's a couple of tips when you're dealing with family and friends. Okay. Tip number one, if, if, if, if possible, take them out to lunch.

Start the conversation off with, don't pitch them over the phone. What, it's possible if they're local and again, this will only really work if they're local. Take them out to lunch. Just, just call them up and say, hey, you know, I've got a couple of things I'd love to share with you. I'd love to talk with you about.

I'd love to buy you lunch this week. You know, it's on me. You know, you don't have to take them out somewhere expensive. Well, if you could take them out to $5 sandwiches, doesn't really matter. Take them out to lunch for, for, for one thing right up front.

I want to tell you about it. When you take somebody out to lunch, think about it. Real estate agents do it. Insurance agents do it. All these people take clients to lunch.

Why? Because there's a psychology of sales that says if you've bought them something, then they owe you something. They owe, they at least owe it to you to listen to what you have to say. So that's why, for instance, insurance agents will always go buy lunch for all their clients because their clients then, those potential customers have to listen to what they have to say because they got a free lunch out of it. So number one, when you have friends and family you're looking to borrow money with, go take them out to lunch.

Okay, now you're sitting across lunch with them. Okay, you don't need a big business plan. Don't get carried away with this. This kind of stuff will take weeks and years and this and that. You don't need all that.

What you want to do is, is, is you just want to radiate confidence. You want to tell them what you're doing and you want to present to them a couple of opportunities. Never leave it where it's just one thing, one decision where they say yes or no. Always give them a couple of options. So if I were looking to raise some money right now and I was sitting down with, let's say, my brother, and I was sitting down presenting this opportunity, okay, I wouldn't say, man, you don't understand.

I need $5,000. I got to go all in on this thing. And look, I'll give you a 50% return, 100% return. Give me $5,000 today. In two weeks, I'll give you $10,000 because I'm going to be rich in this deal.

Okay? What's going to happen is he's going to run. He's going to run like crazy. He's going to probably pay the bill because he knows I don't even have the money in my pocket to pay it. Okay?

You want to be more realistic. You want to be more confident. You want to be more sure of yourself. First of all, you don't need anything. If I'm sitting down with my brother, I don't need his money.

Now, you might be thinking in your mind, yes, you do. You do need his money. No, you don't need anybody's money. You never want to come from a place of need. Come from a place of abundance, not scarcity.

So come from a place of, hey, I'm looking for a win-win here. Okay? So let's talk about it. If I'm sitting down with my brother, looking to see if he'll come invest in me, I'll say, now, listen. I know investing in family is something that's tough.

Okay? I want to share with you what I'm doing. And I'd love for you to consider being a financial partner for me. So first, let me share what I'm doing. Okay?

And then I'll give you a couple of options. And hopefully one of them makes sense. If it does, great. Let's take the next step. If it doesn't, no sweat.

Flush it. And lunch was on me. And it's all good. And we're still family, still friends. I mean, no big deal.

I just wanted to come to you because I respect you. And I'm hoping. I hope we can find a win-win here. So, boom. So there you go.

That's the foundation. You want to create an open environment. You want to create something that's very, very cool, very calm, and something where there's no pressure. And you don't sound needy. Okay?

You're abundant. Okay? Looking for a win-win. If it makes sense, great. We'll take the next step.

If not, no big deal. Flush it. Lunch is on me. Now, you're sitting down. Some of the options.

Okay? What you want to do is you want to say, now, look. There's a couple different ways that I can play in this business. Okay? And I'd like to figure out a way to play at a high level.

Okay? The way this business works is blank. And you get into your pitch. Maybe you're pitching the paid advertising model. So maybe say, look, the way this business works is simple.

I've got an automated system that's set up. I've got email autoresponders. I've got sales pages. I've got videos. I've got all this stuff that's set up.

I need to drive traffic to it. In order to drive traffic, I need to put up some money, and I need to start testing my conversion rate. So here's what I want to do. I would love to. First, we've got to nail it.

We've got to figure out the numbers and what they look like. And then once we figure out something that works, I want to scale it up. So if you're willing to be a potential partner for me, we could start off on a small level. Maybe we start off with $500, for example. Then we could put in a couple thousand or $5,000.

And as soon as we can start flipping $5,000 into $10 or $10 into $20, once we start figuring out really how to do that and work on our numbers, we're going to get better over time. We don't have to. We don't have to do it all off the bat. Let's start with something. Maybe start with $500.

Maybe start with $1,000. And here's what I will do. I will track it all. You'll be hands-free. What I'll do is I will place the ads.

I will track the numbers. I will see what works. Some of the ads I want to do are this, blank, blank, blank. Maybe it's solo ads. Maybe it's a magazine ad, whatever it is.

And say, here's why I believe this will work. Let me share with you some of the results that I've heard from others. And I believe, you know, if we do this right, this is a shot. This thing could really work. And here's what I'm willing to do.

And here's what I'm willing to make happen. You pitch it like it's an opportunity. You pitch it like it's something real. Say, look, this is what I'm getting ready to do. And I would love to have you as a partner on this, maybe on a small level over here.

So maybe one angle is you pitch like an advertising angle. If they're a numbers person, get into the numbers. Share some of the numbers that we've shared in the Facebook group. You know, I've run some recent CPC campaigns, and I've shared exact numbers as to exactly what the results were. So you could basically say, hey, look, for example, here's one of my business partners, Chris, Chris Record.

And one of his recent campaigns, look what he was able to do. Now, what if we just did 50% of this? Here's what our numbers would look like, right? So what I'm looking to do, I'm not saying we should just throw money into a fire and watch it burn. I'm saying let's start with something reasonable.

Here are five ads that I would like to place. And I think we could do really well. Now, to maximize my, you know, I want to own these products right here. So really what we're talking about is owning these products and placing a couple of ads. And based on what I think we could do, I think we can make some big money.

I think we could. But here's what I love about it, is that we could really limit the risk. There doesn't have to be a whole lot of risk here, okay? We could try something out on a small level and see if it works. Now, the reason I'm coming to you is because I respect you.

We're family. And, you know, I don't want to go work with some stranger and do money deals. I don't want to do money deals. I don't want to do money deals. I just love to just try something small.

If you believe in me and if you're willing to give me the chance, I'd love the opportunity to prove to you that I'm willing to work hard. I'm willing to measure all this stuff. I'm willing to track it. Here's what I'm willing to do. And if you just believe in me, I'm just looking for a shot.

I'm just looking for someone to open the door and let me shine. Let me go for it. Let me make it happen, okay? And that's why I came to you. Now, that's an opportunity there.

And give them some passion. Give them some numbers. Give them something to get them excited. You don't need a whole business plan. I've gone down that road.

A business plan. No business plan. And it didn't really help to have a big business plan because I spent, like, weeks preparing instead of just sitting down with the person. Writing a business plan is just you tricking yourself into thinking that you have to have everything perfect before you meet with them. You're just going to end up wasting a lot of time, okay?

Just go meet with them. Go get some rejection first. Go get some no's, okay? Go out there and get some no's so you can see why people are saying no before you take any time, okay? So one idea there is to have, like, an advertising partner or something like that.

Here's another idea. Finding a silent partner, a business partner. Maybe you have somebody who, for instance, has a friend or family that has their own small business. And you say, hey, look, I would really like to join this internet marketing community. They've got a ton of education.

Let me show it to you. Now, what I'm looking for is a partner. I'm going to build the marketing side, and I'd love to have us work together on the education side, okay? So go to somebody. He owns their own small business or something.

I'd say, look, let's join together. Let's partner up, okay? You basically, I'm looking for somebody to fund the education, so you'll have access to all the education. You'll have access to learn this stuff. You'll get access to it all.

And I'm looking to build the marketing side, okay? You'll get access to all this great stuff. I'll do the marketing side. Here's how it'll work. You fund it, so you buy all the education.

I'm going to start the marketing. I'm going to take 50% of whatever I make, and I'm going to pay back. That's you for funding it. So essentially, like, let's say they go all in. Essentially, if you spend maybe like $5,000 to get all the education, and I'm going to market.

You'll own all this education free and clear. That can help you build your business. You'll own it all. You'll have access to it all. You'll own it all, and you've got it, right?

As soon as you buy it, you have access to it. And then I'll be able to maximize the compensation plan, because... I'll be the guy on the account. So when I go out and market, I own the products. So I'll be able to earn full commissions.

I'll be able to pay you back so much faster. So this is a true win-win. Now, here's the cherry on top. The cherry on top is this. Let's say his name is Bob.

Listen, Bob, so you'll have access to everything. You'll be my funding partner, kind of my tuition partner, if you will. And you'll have access to it all. I'll do the marketing side. You do the education side.

But here, I'm also going to be learning, and I'm going to be making connections. So what we'll do is... Until the loan is paid off, okay, once a week, we'll meet up, and I'll share with you ideas for your business that I've learned from the training. So I'll go through it. I'll go through the stuff with a fine-tooth comb while I'm marketing, because I want to learn the product.

I want to be a product's product. So every week, we'll meet up once a week, and we'll go through the stuff I'm learning and how we can apply it to your business. So the end result would be that we can help you get your business online and make it more successful. As I learn about email marketing, I'll share. I'm learning with you.

As I learn about, you know, this guy, Chris Record, and how he runs his business, hey, I'll share it with you, and we'll find things that you can use for your business together. You'll have access to it all. You can watch it at your own pace, or your assistant can watch it or whatever, and I'll be watching it, and every single week, I'll be giving you feedback. So you'll be helping me get my business started. You'll be accessing the education.

It'll be a loan, which means I'll be paying it back, and you'll own all the education free and clear. You'll be my silent partner. It's a win-win there. So that might be... Another way to present this to somebody, where you don't have to form bank accounts together.

You don't have to form a corporation together. No, they're just an education partner. They're just an education partner. And that would be great for somebody you know that has a small business, or they're an entrepreneur, or they're a business owner, anybody like that. There's a lot of people out there.

And then maybe the third option is an actual business partner. It's an actual business partner. You can say, hey, option number three is, you know, let's make some money together. Option number three is, you know, we split the money up. We're on a 50-50 deal.

You're the funding partner, and I roll up my sleeves, and I'm the work partner. So you come in with the money. I come in with the hard work. And because you funded it, I'm willing to give X percentage of money to you. Okay, whatever you want to work out.

Let's just for sake of keeping it easy, let's call it 50-50. I'm willing to split whatever we make 50-50. You might set a cap on it. You might say, okay, look, you know, how about this? If you help me go all in, okay, we'll be business partners.

So how about this? So if you put in $5,000, help me go all in, then we'll split everything 50-50 up until the first $50,000. So half for you, half for me, that's $25,000. You invented five, you made 25. That's great.

That's a great one, actually. I had someone on my team that actually presented something like that recently to, you know, for funding for a business, and it works well. And you could start lower than that. You could start at, you know, a lower one. You can negotiate if you need to.

But, you know, if you're trying to raise $5,000, you can offer someone a business partnership off of the cap, and you could start low. You know, you don't have, like, $50,000 is pretty good. It's pretty good for an investor, in my opinion. But, you know, like I was saying, you could start lower. I know he started at, like, $25,000 as a cap.

And then from there, you know, that person could decide, you know, if this is a good, if they see the potential, that person could end up becoming one of your, you know, one of the people on your team that's building a business as well because they see the results. They see what you've been able to do, and they see the power of it. So that's a great one. I like that one. People are doing it.

I mean, people are doing it in the community. Now, let's put up a disclaimer, though, Arthur, that, look, right now, I mean, everybody should know, look, neither Arthur or I are legal attorneys. We're not accountants. We're not certified on any of this kind of stuff. These are just ideas.

They're just ideas that are being thrown around. These are not even things that we endorse. We're not saying you should do these. And when you're doing anything, it's always in your best advice to be able to take things serious, be professional about it. You know, look, sometimes business is done on a hand, sometimes it's a handshake, sometimes it requires a contract.

You never want to get screwed, but you also never want to overly complicate things for somebody who doesn't do business with you. So find what works for you, and just keep in mind, look, these are just ideas we're throwing out there. That's all this is. We're just saying Arthur's saying he's seen it with his own eyes. I've seen it with my own eyes.

We've seen people come up with the money using these resources.