5 Dangers of Starting a Business with Family Members

Most people launching a new business will help from family. New businesses borrow start-up capital from Dad. Sis would be a great partner. Let's do this. It's the American dream.

Makes perfect sense, right? Your family is already inclined to help you. You trust them. They trust you. If your business is successful (and you know it will be), then you are doing them a favor. Who would you rather share the good fortune with than your own family? Generally, starting a business with family members is a bad idea.

Take a look at Why Friends And Family Are Your Worst Business Enemies. Mark Kohler, an attorney and CPA, writes an insightful piece in Entrepreneur Magazine’s blog. I completely agree.

My shareholder oppression practice deals with disputes among business partners every day. Many of those partnerships-gone-bad involve families who are now at each others’ throats. The human emotional carnage involved in those lawsuits is often heartbreaking.

Problems with Starting a Business with Family Members

Here are the problems:

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