Funding 101: Document any financial help from friends and relatives - K Chandrasekhar, Founder & CEO, Forus Health

When you start as an entrepreneur, you will be get financial help and invested into by your friends and relatives, because they believe you. But when you go for venture funding or professional funding, in future, it is good to have documented all the information about the money you had obtained as initial investment, advises K Chandrasekhar, Founder & CEO, Forus Health, speaking in Tamil.“In some occasions, I am not saying all occasions, what happens is that the expectations of the initial investors could be different,” cautions Chandrasekhar. “They may say, ‘I did not give you the money expecting that you would give it back. I thought you would be giving me a small share in your company.’”

It’s not wrong, but in case you go for venture funding, there could be hassles, he notes. So, we should clarify the amount of investment and the date of returning it back to the friends and relatives, guides Chandrasekhar. “That is safer.”

When you are starting, it is common that what you expect the most is some funding, rather than make an issue of documenting, acknowledges Chandrasekhar. “It will not be a problem if you lose in your venture, but if you succeed, it could be a problem for you. I wish that we all will succeed, so people should basically try to document everything so that it will be safer.”