It’s really easy to find information about raising money from angel investors or VCs, but many people don’t think about another important way to fund your startup: raising money from family and friends. I’ve raised money from friends and family twice and want to share what I’ve learned so that you can raise money from your friends and family and still be able to attend your family reunions. Raising money from friends and family can be easier and less complicated than raising money from professional investors, but is not without drawbacks. There are certainly pros and cons to raising money fro
. . . → Read More: 5 Lessons For Raising Money From Family And Friends
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Q: Say I have an angel (SEC accredited) who’s ready to invest at an amount well below $100k. How would this impact on a future round with VCs? Is there some standard or average pre-money and post-money that happens in angel deals? Also, the angel in question is a family member of a friend, so would it be better to have them invest as a family/friend financier rather than an angel, and how exactly would that work? A: (Brad) Let me address the last question first. There is no real difference between a “family/friend” investor and an “angel” investor other than semantics. Structurally…. Similar topics at:  Family and Friends, Selling Stock -- SEC Rules, Valuation  accredited investor, sec Many entrepreneurs turn to friends and family for their first funding needs. In fact, it is common for non-tech startups to raise all the capital they need from friends and family. I don’t know for sure, but I would suspect that friends and family make up the largest source of funding for entrepreneurs and startups. Friends and family financing is popular because it is easy to get a hearing from the people who know you best and they are positively inclined to say yes. But there are some negatives as well. It’s tough to know how to price and structure an investment where the investors are clos For most startups, the Friends and Family financing is essential to get the company started. Unfortunately, most people who invest in Friends and Fam Friends and Family financings are always the easiest to complete – often taking less than two months from start to finish. Friends and Family rounds At the early startup phase, when the money from friends and family is being invested, entrepreneurs usually can’t afford good lawyers and may not hav Q: Is it wise to seek financing from family members and friends? And how does this strategy fit in with my overall financing plan for my company as I Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to r Similar topics at: Family and Friends, Funding Sources Overview, Selling Stock -- SEC Rules financing food chain |
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