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Comment by malandrew | Hacker News Reader

Tell them to give you a $50 note. Take a lighter out of your pocket and burn that money in front of them and see how they react. Then tell them that you are not going to pay them back. See how they react.

If they remain cool throughout the ordeal, I reckon it's okay to take their money.

If they freak out, pay them back $50 and consider that the best $50 you ever spent because you possibly saved your relationship with your father/friend.

I reckon that burning money like that will make the possibility of losing it all much more real.

The reason I suggest $50 as opposed to a $5, $10 or $20 note is because it's just large enough to get most people riled up about but not so much to be consequential.

You might want to try a $100 note if you want a higher threshold.

Who knows if this crazy idea will work, but I'm curious what will happen. Consider it an experiment that you can later blog about to get traffic.

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This is the best idea I've got so far about how prevent problems when raising money from somebody close to you. Another way to do so, is to remaind them that the round is called Friends, Family and Fools not for nothing.

I honestly wasn't expecting this to be as upvoted as it was. I have some pretty crazy ideas and this was one of them.

That being said I think there is more than enough interest from just those Hacker Newsers reading this thread to show that this would definitely be a popular blog post if written.

With that in mind, go for a $100 note instead of $50 if you decide to do this and write about it as that denomination would make for better linkbait as a blog post title.

Alternatively, you can ask them if they would be okay giving you $100k to go to Vegas and bet on craps or roulette.

If you do decide to take their money, you next need to figure out if they would be good investors or not. Will they want them to have a say in how the business is run (i.e. voting rights)? If so, would you be okay with them participating in some fashion. If not, don't give them voting rights. If that means that they need to be given preferred shares, I would check with a lawyer to see what implications that has for future funding rounds.

I think a closer analogy would be poker. With craps and roulette you're at the mercy of the house and aren't in any control. Poker you're playing against other people and make your own decisions based on the cards you hold and ultimately it's your fault you won/lost.

Either way it's a good analogy, any friends and family giving you money need to know that they won't see it again for a long time, if ever.

I don't think it's a fair analogy. The expected value of a startup is higher than the expected value of a night of gambling in Las Vegas (otherwise, VCs would be at the roulette table right now). It would be pretty hard to prove my point mathematically, but most people will agree that the aggregate wealth generated by startups. including those who fail (negative wealth), is greater than 0, which is not the case with gambling.

Edit: The poker analogy is already much better.

Excellent point, but I'm not sure either his friend or father are interested in investing so they can increase the aggregate wealth of society.

That being said, I think that at the very least your father can look at it as a better investment than college if you do fail. You'll learn more in 6 months to a year building your own business than 4-5 years of college teaches 99% of people.

Plus, it can be said that Casinos increase the aggregate wealth for society as well. They are a business like any other and as valid as any Zynga, Playdom or Playfish. They are in the business of offline social gaming.

I think you misunderstood me or, more likely, my argument wasn't clear. What I really meant was that the "money" generated by startups > "money" invested in startups. Which implies that on average a startup makes more money than it loses (expected value is positive). This is opposed to gambling against the casino where on average, you lose money.

I think the venture capital industry would disagree with you as they have lost money in aggregate. I'm almost certain that if you take the last 10 years of NVCA data you will said that VCs on average lose money.

ref: http://www.bothsidesofthetable.com/2010/07/16/whats-really-g...

That being said, there is a lot more created besides money. All this money generates lots of "experience points" and lessons learned.

I agree that more value is being created, but more money being created is questionable.

You might want to read this little tidbit beforehand:

http://www.law.cornell.edu/uscode/html/uscode18/usc_sec_18_0...

Have people ever been arrested and charged over that statute?

What's the basis for it even being a law? The only thing I can think of is to prevent people from adding extra 0s to notes to make them higher denominations, which quite frankly is an absurd idea today.

Also, note the wording: "with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued"

If he did what I suggested above the note would be unfit to be reissued, however it would not necessarily be his intent. His intent is to test his friend/father and the note is a means to that end. On the other hand, to make his point to his friend/father he would have to show them his intent to make the bill unfit to be reissued.

On the other hand in many museums you have machines for pressing and defacing pennies to make them into novelty items.

"On flattening pennies and other coins, the US Mint site has this to say:

Section 331 of Title 18 of the United States code provides criminal penalties for anyone who “fraudulently alters, defaces, mutilates impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the Mints of the United States.” This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it to be other than the altered coin that it is. As a matter of policy, the U.S. Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent."

The important words here are "fraudulent intent," which means that while the US Mint doesn't condone this action, they have no problem with it.

However it is illegal to flatten Canadian coins.

ref: http://boards.straightdope.com/sdmb/archive/index.php/t-1338...

This article here says otherwise, but provides no evidence that anyone has ever been prosecuted: http://www.msnbc.msn.com/id/7148966/

You also can't advertise on the note using rubber stamps. See "Where's George?". The Where's George website was investigated and ceased selling the rubber stamps and no further action was taken: http://en.wikipedia.org/wiki/Where%27s_george http://www.freelawanswer.com/law/1543-law-4.html

Either way, there's plenty of examples of people rendering bills unfit to be reissued with no problems:

http://hypebeast.com/2010/05/scott-campbell-if-you-dont-belo...

http://www.thisblogrules.com/2010/03/defaced-presidents-maki...

A classic! And please let us know what happened if you actually do this.

While this idea will make for a good story, don't do it. Your job is to take calculated risks with money, not light it on fire.

Again, I admit it's a crazy idea.

However, taking money from a good friend or family carries with it a risk far greater than losing $100k. It carries with it the risk of losing a friend or family member in the case your startup fails and you lose their money.

This idea is not one to make a good story. In fact, getting a good story out of it is incidental and that can be used in the future to generate pageviews and attention (it meets the criteria for being a "sticky" idea). The objective of this is to create a simple experiment that may possibly give you insight into whether or you may destroy your relationship with your friend or father in the case you fail and lose all $100k.

Again, I don't know if this idea will even work, but it seems like it could provide insight and another piece of information to draw open to make a decision on whether or not to take their money.

I would also venture that after this incident, they would withdraw their offer if they are the type that can't handle losing money. In other words it may serve to help both sides decide. It may help him decide whether he wants to take the money from his friend/father. It may also help his friend or father decide if they are really willing to put $100k in the hands of someone who would burn a $100 bill for any reason.

To be an entrepreneur you need to be a little bit crazy. I think that's why my suggestion got many more upvotes than I anticipated. HN is full of entrepreneurs that are a little bit crazy at the core. Sane people don't make good entrepreneurs. If a startup founder isn't capable of taking a $100 risk like this to test an idea, would he be crazy enough to spend $10,000 on a crazy idea with lots of both risk and reward potential just to get user adoption?

Here's an NY Times article on the subject:

"Just Manic Enough: Seeking Perfect Entrepreneurs"

http://www.nytimes.com/2010/09/19/business/19entre.html

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