What are some examples of successful friends and family rounds for early stage startups? From Quora
What are some examples of successful friends and family rounds for early stage startups? The story
Well, once I was selling on Amazon. I was reading a lot about nootropics and testing them – making stacks in my garage. By far the most exciting was Phenibut. This is out of scope, but I tell you, the fist time I had Phenibut, I felt my life can never be the same. When it kicked in, it felt like somebody had drawn a smile on my face and nothing, absolutely nothing could have taken it away. I remember being hit by a car at the crossroad, the driver did not stop. He did not hit me hard, but I fell down on the ground. We was apologizing and making gestures. Normally, as I know myself, I would come after the guy or least would I yell at him what an idiot he was, not stopping there. But with Phenibut – nothing! I actually remember waving the careless driver goodbye, jovial. I thought: WoW! This is something. I have to spread this to people.
I wanted to make an energy drink, but I found out, that Phenibut tastes like vinegar. It was not the terrible tastes after all, but the biggest hinder was a start – up cost for functional beverage producer > 50k $ at least, and I was too lazy to look for VC investors (actually did, two of them ditched me).
So pills was the next logical alternative. But I found out that Amazon restricts Phenibut. Parallel, I was reading how to be a good seller on Amazon. I was astonished by Private Label at that time, because it was a guarantee you won the buy box (sooner or later) and you could build your own brand. All you need is referential product – the product already sells good and you can make things even better than this product. So I looked, anxiety products, since Phenibut made a social Casanova. So, after some research there it was:
Nuphorin at that time was a good selling product. That means < 2000 # ranked in health & personal care category – a very competitive and lucrative category.
That product stated that it is best anxiety relief bla bla bla, based on substance called GABA. It is natural inhibitor, even alcohol contains it. The problem is that it won’t cross the blood brain barrier easily. You need to bind something on GABA that does in order to do so. In case of Phenibut it is its unique structure, it has benzene ring. But I said Phenibut was prohibited on Amazon. Guess what? Some researched and warrior attitude of not giving up, and I found the alternative – picamilon. Picamilon is GABA too, but it has niacin in it for crossing BBB. You know where else is niacin? Yeah, in energy drinks. We got ourselves another possible application for the market. Not even stress and anxiety relief, but also some energy levels improvement. I started to play with a field of category called calm energy – being calm, focused, and energized- mood lift and energy enhancement. Picamilon was allowed at that time on Amazon.
I found a supplier to mix my pill after a lot of emails sent. The problem was I had to order 850 bottles at once. At almost 6 $ per bottle, this was 5k $ right. I was like 20 at that time. You know what I did.
You know what I did afterwards?
Scope question: What are some examples of successful friends and family rounds for early stage startups?
My mom is a doctor making > 100k per year after heavy taxes. I had 2500 $ my own money from working at the plant in the summer. I asked her for the rest. I did exactly this, what I am writing here right now. I presented her my plan. Passionate, pills (she is a doctor, she is inclined to that stuff, if I had an electro – product plan, I would go after my uncle, who is electro – engineer), asked for the money, had a wine with her. We made a deal that I give her back the money or not, but she was overwhelmed by my passion, I think she said, she didn’t even want it back.
So, that’s how I got my money!
I had a plan with everything I could explain and show, I had a passion, I went after people who had money (2500$ for a doctor ? Not a big deal, right ? ) and who I knew would listen. I must state it again – pills – go speak to a doctor or pharmaceutics. Tech product I would speak about with my dad, who is an engineer (although probably would have given me no money at all). This product gave me so much energy to implement, because I knew what I can do better on the market for already good selling product. In another word, sales were there, and look, I have a better thing.
Rest is history. I must tell you, it went well, and I reached the point when I was making 250$ per day. But the new regulation from FDA came and pulled off picamilon from nutritional supplements hence also from Amazon. I tried different products, but then got overwhelmed by the arrogance of the platform that speaks to you like a caesar of Constantinopole to the Barbarians. I am more into building a blog now – Your Inexhaustible Life – Inex Life
So, to sum it up, I would say – passion, clear plan, and right pitch to right family members – if you have no doctors in the family, then everybody, even your cousins in the family must know (it must be absolutely clear to them) that you like the pharma stuff, or anything else, this is just a parallel – “oh, you know Johnny is a car loving boy.” – bla bla family’s collective wisdom, I hope you know what I am talking about.
And you are taking care of your family too. So, it must be clear that either you will benefit them greatly or if they decide to take a risk, it must be a very small risk. You would not take a 20 000$ from your uncle Joe, if he makes 40 000$ per annum. He must have worked so hard to put that money together.
So, good luck with your fam!