How to start a business without ‘friends and family funding’

Building a startup is a huge undertaking, and one of the first steps and biggest challenges is securing funding.

There’s a horrendous concept in the world of early-stage startups called the ‘friends and family funding round’. To source the investment needed to initially kickstart an idea into a real service or product, entrepreneurs are usually expected to fund their startup by raising money from people within their immediate network.

But not everyone has a rich uncle who works in finance who can invest thousands in their idea. While 75% of founders come from wealthy backgrounds and have access to a network they can call on for funds, for most people this is simply not an option. It wasn’t for me.

I certainly couldn’t call upon people in my network to invest in my business, Zero Gravity, when I founded it from my childhood bedroom at the age of 21. I had to operate for the first nine months with very little funds – the last £200 of my student loan in fact. It was very challenging, and it constantly felt like the world wasn’t on my side. But it’s absolutely possible to start and scale a business without friends and family funding. Here’s how.

A little goes a long way

It’s possible to start bringing an idea to life with whatever funds you’re able to gather up yourself – whether that’s through savings, a part-time job, or in my case, from the last remnants of my student loan.

After attending state schools and coming from a single-parent background, I graduated from the University of Oxford and moved back to my childhood bedroom in West Yorkshire. At Oxford I saw first-hand just how high the barriers are for talented individuals from socially mobile backgrounds to reach top universities and careers, and I wanted to change this through innovative technology that could unlock their potential.

I didn’t have a big pot of money, a flashy office or even a team to get going, but I had an idea, a clear plan of action, and a relentless drive to deliver results.

If you equip yourself with the required skills, you can be resourceful and rely on yourself to kickstart an idea, rather than needing to hire others. Using some of the £200, I bought a domain name and web hosting. I then relied on the coding skills I’d taught myself when I was a teenager to build a marketing website and basic version of what is now, Zero Gravity’s platform. Recent developments in AI have now made this easier than ever before, by automating time-consuming activities like drafting social posts or writing tailored emails.

You can also buy subscriptions to a variety of SAAS products for little cost which can help you create professional videos, graphics, and marketing materials. The end product may not be the perfect result you could achieve by having an in-house team, but what these SAAS products do give you is executional speed and cost efficiency – exactly what you need to get going.

Focus on stepping stones

When growing a business from the ground up, it’s important to create milestones and be relentlessly focused on achieving a few set goals, before moving on to the next stage.

You can’t change the world overnight. Too many founders overstretch themselves by concentrating on too many things at once. It’s completely right to have a clear vision and strategy, but the key to a good strategy is that it aligns with your current capability. This means deciding what not to do, which is just, if not more, important than deciding what to do.

Focus on developing the core proposition of your business first. Whilst a lack of resources will feel like a constraint, it will also spur creativity, innovation, and efficiency. Use your leanness to your advantage.

Storytelling has power

If you can’t rely on friends and family funding, you’ll need to generate investment from external sources. To do this, you need to create awareness of your brand as no one will be interested in what you’re building unless you make them interested.

You need to firstly have a clear mission and know what your brand is about. Think of building your brand like building a Sims character. What’s its purpose? What’s its core values? What foundational beliefs does it have? And once you know who you are, you can build a visual identity that reflects that.

You can then amplify the story behind your business through social media and PR. You don’t need a paid media budget or marketing team when you’re starting up. You can create your own marketing materials and launch it on your own channels. When I shared an explainer video of Zero Gravity on my personal Facebook profile, my friends and family reshared it, and then their networks did. I had over 1,000 user sign ups within the first 24 hours, and it was picked up by media publications like The Tab and The Times. This then led to investors getting in touch with me through LinkedIn.

Source the right external investment

If you have no network for raising investment, you need to build one. I worked closely with my initial investors to build a network which helped the business scale from raising a £425,000 pre-seed round to a £3.5 million seed. While creating a buzz on social media and PR coverage will help with growing a network that comes to you, you also need to proactively reach out to interesting people on LinkedIn and attend relevant events.

But remember that not all investors are the right investors for you and your brand. You need to stand for something and be willing to defend it. Listen to feedback but understand that not everyone is going to buy into your vision. Focus on your unique mission and you'll attract the people who are genuinely invested in what you do. That way, they'll support you not just in the early stages, but the long-term.

The journey to success

Despite starting out with £200 and no friends and family funding, over the past few years I’ve raised over £6 million of investment to grow Zero Gravity. If you start with no money, network or insider knowledge, the brutal reality is that you’ll have to defy the odds to succeed. But if you are able to break through the barriers that hold back entrepreneurs from normal backgrounds, you’ll have an unparalleled opportunity to not only build a great business but one that inspires others to give entrepreneurship a shot too.