[gsylvie]

I would do a small friends & family round pre-revenue. E.g., 8 friends and family @ 12.5K each = 100K. I don't mind if my success makes my friends & family some money.

But I'll sure feel bad if I take their money and lose everything. Perhaps that would be motivating...

(Note: where I live (BC, Canada), the provincial government offers a refundable 30% tax credit for investments like this, so if I did lose everything, friends & family would only be out 70K).

[watty]

This seems like terrible advice. I'm highly against borrowing money or receiving investment money from friends / family. The risk simply isn't worth the reward.

[paulddraper]

I had a friend borrow money from his family for a business that didn't work out.

It's a very uncomfortable situation.

[gsylvie]

I think it's better to structure it as an equity investment, and to really make it clear to friends & family that they are buying a lottery ticket that will probably lose.

Also, make sure the investors are people where you wouldn't be uncomfortable if they saw your company's annual shareholder reports every year for the next 20 years - both in the failure and mad success scenarios. An ex-spouse or potential ex-spouse perhaps not a good choice.

[ttul]

Unless you're independently wealthy, F&F is often the only money you can get when you have no track record.

[cortesoft]

Most people in this world don't have any friends and family that have $12.5k to their name, let alone ready to invest in an unproven start up.

[devdad]

This is really out of touch with the majority of friends and family where I come from. Sound advice if you're from privilege I guess. (Not meant to be rude)

[gsylvie]

I'm a 30+ year old software-engineer in Vancouver, BC. And there's a housing bubble. My friends are mostly also senior developers / software architects / managers etc.

Just get older. Then your friends will be richer.

[jboggan]

I wish I could do something like that but my friends and family are not accredited investors, even if they have $10k to give. From my understanding of securities law and compliance it really isn't possible.

[gricardo99]

In the U.S., depending on the state, there may be an exemption for friends & family:

https://www.strictlybusinesslawblog.com/2011/08/15/can-a-fri...

[gsylvie]

Exactly! Here's the BC, Canada website on exactly this (British Columbia Securities Commission): https://www.bcsc.bc.ca/For_Companies/Private_Placements/Priv...

[ttul]

In the US and most Canadian jurisdictions, friends-and-family can obtain an exemption from the accredited investor requirement. Same with employees.

[jcadam]

Most of my family is poor and wouldn't be able to scrape together $1000 on the spot if their lives depended on it. I'm the exception here.