Family asking to buy into business

[g5media]

I'm in an enviable position where I've had a great idea (a new way of implementing an old idea but I'll be first in market with it too) and it will cost very little to do (whole business formation, site design etc for £3k and I've got roughly £2k behind for some initial marketing costs)

Thing is that I've got family (who are fairly experienced in running businesses themselves) who are asking to come in with me without any pitch on my part. How do I value it? I've identified that I believe I can make a decent impact with an extra £3k worth of marketing revenue but how do I value my company so I know what share to give them?

I'm also working full time btw as once the site is out of beta it will require very little maintenance / support so I don't currently draw any pay (actually at the moment I've taken the old sites down whilst I get the new design done and switch hosts).

As a general question is the extra flexibility in having more money available worth diluting your own holding in the company?

[An Oasis]

As execs or non execs? And if they are execs, can you work with them?

[g5media]

Good question. I think this needs a lot more research...

[MH1]

Only a personal thing, but I hate working with family and friends.

I never like getting rid of anyone, but it can be very hard for people to work correctly with family in particular, make sure you would want them as a business partner/investor if they were not family. Too many times you hear of people not pulling their weight.

[Write My Site]

In your position I would be asking myself the question "What will these family members add to my business?" If it's just the £3k, forget it - it's not enough money to consider giving away a part of your business, especially if you've already got enough money to get started. It's their experience, skills, contacts, etc that should determine whether you go into partnership with them. Can they add value to the business? Will they help drive it forward?

[Intel Clarke]

Very good advice from Emily, it is all about supporting your business, if it is just cash, ask them or a bank for short-term loan

[alex4orne]

Family and friends is never a good mix in business IMO, have had a couple of experiences and it has gone wrong. You end up not speaking or worse. If you can keep them out I would. Otherwise just make sure its an investment and not a participation.

[scribe]

You can hire and fire ( Joe Blog off the street, but when it comes to family and friends your up the creek. My advice stay clear .

[Faith28]

I agree with the sentiments about steering clear of work with family/friends.

do you need them?

If you need money just borrow it from them or the bank, otherwise let the business pay as it grows.

[g5media]

Ok thanks for the advice all - I've politely declined the offer :)