[1cvmask]

There are so many examples of investors passing over friends as investments.

In fact from anecdotal observation people do not invest in friends in general. It is people one or two removed who take the plunge.

[cortesoft]

This is probably smart. Running a startup is stressful enough without worrying that you are risking your friends and family's life savings.

[sanderjd]

On the other hand, this is how Warren Buffett got his start, and (from his biography Snowball) it seems to have been a strong motivator for him.

[cortesoft]

Yes, someone wins the lottery. I don't think we should use that as evidence that playing the lottery is a smart financial decision.

[sanderjd]

I agree. Just pointing out an alternative viewpoint, but I kept thinking while reading the biography that his path to the top was risky and stressful.

[robocat]

Accepting money from friends is highly risky in my opinion.

A friend might say they are willing to lose 100% of their investment, but if you fail and the money is gone, there is likely to be negative effects on your friendship from both parties. Also if the financial state of your friend changes, like getting a mortgage or losing their job, they can get buyers remorse.

If you do make it big, then your friends might be annoyed they couldn’t invest (although if they are really twisted about it then perhaps they are not a great friend anyway).