There’s a phrase that I don’t like, but if you’re starting your own business you will hear and is important.
The phrase that I don’t like is “Friends, Family, and Fools” – and I don’t like it because it’s exclusionary, so my preference is “Friends, Family, and Followers”.
The idea of FF&F is that it’s money that you get given to bootstrap your business where the person giving it to you doesn’t really think they are going to get it back. (Of course, this also includes your own savings, or what you sacrifice from your own income.)
The purpose of FF&F money is that it’s very hard to do anything meaningful with no money at all – to get the ball rolling you need to make some investment.
It’s usually used in the context of getting you to a point where you can get seed investment, although if you’ve listened to enough of these posts you’ll know I’m keen to make sure founders know that it’s just as valid to scale up a business through cashflow, rather than needing investment.