And don't think that the rest of the family will escape unscathed. As with any family matter, there's no limit to how complicated and downright childish things might get. "We'll be sitting around, and my parents will compliment my brother backward and forward," says Tony Parnigoni, founder of Marketplace Promotions Inc., an Atlanta company that coordinates in-store sampling and merchandising events. "To them, he's leading the perfect life. He has a company car and a salary. And he's not in debt to them at all." Parnigoni, 27, borrowed $21,000 from his parents to finance his three-year-old company, which should post sales of $1.5 million this year. "We've decided that it's just money and it's not going to break our relationship with our child," stresses his mother, Henré. "But it's a difficult, divisive thing."
Even such determination and awareness don't alleviate the strain. A banker might cast aspersions on your ratios once a quarter, but your parents will look askance every time the subject of your company -- or your life -- comes up. A three-day weekend? The eyebrows edge upward. "You become a slave to their money," says Kenn Latzer, who borrowed $10,000 to launch Process Efficiency Products Inc., a manufacturer of industrial water-filtration systems.
That's assuming the money isn't lost forever. One entrepreneur couldn't face his parents for nearly six months after filing for bankruptcy protection. "When they gave me those funds, it was an expression of their love," he says. "They were intelligent enough to know they could lose it, but their focus was elsewhere." More than a year after his company folded, he still struggles to overcome the feeling that his father thinks less of him. "I guess I now think that if you have to use your parents to do the deal, something is wrong with the deal. It is telling you something," he says.
You'd be wise to listen. Because with their money, your parents are extending their control over you and your company. For bailing you out -- yet again -- they'll feel entitled to something. You won't know exactly what until after you've taken the funds. "You drive faster than your parents, and if you make them ride in your car, they become uncomfortable," says Bert Bourgeois, whose parents lent him $15,000 to help him start an investment bank. "The same could be said of using their money. They are used to having it in a bank. Until you pay them off, you can't have a sense of autonomy. There is a kind of emotional collateral."
And you will feel it. Maybe at family gatherings, when people make comments: "Hey, I hear they set the kid up in business." Or perhaps in less predictable -- more unsettling -- ways. Like waking at dawn, with your eyes popped open and your stomach aching over the realization of the added responsibility. It happened to William Borne.
Morning after morning in 1986 Borne used to wake up at 5:00 a.m. with the same awful pictures spinning in his head. He saw his father, Reynold, sitting in the kitchen of the home he had built with his bare hands, fidgeting while his son spoke. Borne still remembers the look of helplessness and anger that came over his old man as he realized what his boy was after. So does Borne's father. "You work and scrape every penny so you can look forward to early retirement, and then -- boom -- your son asks you to loan him everything you have," says Reynold today. "I just stared and said to myself, How can my son ask me for this?" Reynold Borne had spent 32 years blending gasoline, loading barges, and pumping pipelines. About a year earlier, picking the asphalt off his work boots for the last time, he had cashed in his company stock for about $170,000. He was counting on the interest income from that, along with his pension, to tide him over until Social Security would kick in, three years later. Then his son, desperately strapped for cash, asked him for a $100,000 loan. "I was afraid of the answer I might give," says Reynold.
After a few minutes of deliberation with his wife, Audrey, Reynold regained his composure. Of course they would help their son; how could they not? This wasn't about money anyway. As the Bornes saw it -- and as so many parents do -- their son had placed before them a referendum on their love for him. They were damn well going to vote yes. "I've seen Bill go after things," says Audrey. "He does not fail."
If only business were so simple. But having gone to his family for a cheap loan, Bill found himself paying a dear price, feeling frozen and terrified as he watched the sun rise. "I was now responsible for my parents' livelihood," says Borne, whose company is based in Baton Rouge, La. "You wake up, and it's the first thing you think about. It popped into my brain all the time, anytime a client was lost or a hospital closed, anything that would threaten me. I did a lot of second-guessing." There were times, Borne concedes, when he wished he could live under the comparatively simple strain of imagining a banker's stern face or the disapproving frowns of a group of private investors. So much, it seemed, remained unspoken. "You take the money and then you can't get it off your mind," he says. "It slowed me down. It prevented me from opening new offices. If a bank takes a hit, that's just the cost of doing business. But for my parents, this was an unnatural risk."
