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What do you give friends & family investors in exchange for money?

Newbie fundraising question. What, in plain terms, do you typically give friends & family who want to give you money toward your startup. It seems like they for sure would want equity, but how much do you give usually & what if it doesnt make a profit? Im still building the mvp.

  • If this is your first startup, and more importantly, you have not had a first success – I would steer clear of family and friends money. That is the HARDEST money.

    Look, startups are hard – we all know that the average startup has a 10% chance or lower of survival. So there is a 90% chance your family and friends might be mad/sad/avoiding you after this. It can stress your relationships.

    My suggestion: Don’t take it. If you decide to, make sure they have told you 10 times that it’s money they don’t need for anything – and have them sign a contract saying that it’s money they can fully afford to lose 100% of.

    I’ve had 1 success, and 1 failure. I won’t take money at all from family at first. I will bring them in during a later stage when I’ve reduced their risk and want to enrich them a little.

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  • Typical dilution per round is 15% – 30%. If you want to be generous, give them on the higher end. But like other poster said, make sure it’s money they don’t need. And make them aware of the risks.

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