Friends and family
Pros: With a review process that may be as simple as a phone call, the F's are often the most enticing option. "It's usually a minimally documented transaction without any lawyer fees, says Eric Siegel, a lecturer with the Wharton Entrepreneurial Programs. "It's a fast, low-cost benefactor relationship with Uncle Harry who has a lot of money and just wants to help you out."
Cons: Not being able to look Uncle Harry in the eye come Thanksgiving because your business went bust. "There's definitely a psychological cost," Siegel says. "You'll feel much worse about losing their money than a bank's money."
- Digital tip jar coming to a coffee shop near you
- How immigrant entrepreneurs are making it
- Ex-con launches startup aimed at inmates
- Free startup advice from Silicon Valley's best, including Marissa Mayer, Marc Andreessen
- Why Atlanta is ripe for innovation
- I'm a legal immigrant, but not allowed to work