Thank you to CO–U.S. Chamber of Commerce for providing the content 5 Tips to Prepare for a Friends and Family Round of Funding.
Starting to raise funds for a pre-seed company? Here is a guide to raising pre-seed funds through friends and family.
Attracting investors can be incredibly difficult in the early days of a company. For this reason, some founders choose to seek pre-seed funding with the help of friends and family.
A friends and family round of funding is when founders seek investment from their personal networks. This round of funding is considerably less formal than rounds involving professional investors because of the company’s virtually nonexistent performance reports and revenue streams.
Additionally, the investment compensation for a friends and family round of funding is typically lower than rounds involving professional investors. The low investment compensation and terms may be attributed to friends’ and families’ personal motivations for investing: Your loved ones want you to succeed and are often more interested in helping you achieve your dreams than seeking a big return, as an investor would.
To continue reading, please visit here.
CO–by the U.S. Chamber of Commerce.
