Full Definition
A friends and family round (F&F round) is the earliest and most informal stage of startup fundraising, where founders raise small amounts of capital from their personal network — friends, family members, former colleagues, and close acquaintances. This is often the very first external capital a startup receives.
Characteristics
- Amounts: $10K to $150K total
- Terms: Often informal; may use simple SAFEs or convertible notes
- Investors: Non-professional investors with personal relationships to founders
- Due diligence: Minimal — investment is based on trust
Considerations
- Be transparent about risks — most startups fail
- Use proper legal instruments (even a simple SAFE)
- Never accept more than friends/family can afford to lose
- Securities laws may apply — consult a lawyer
Real-World Example
A first-time founder raises $75K from three family members and two college friends via SAFEs to build an MVP and cover three months of expenses.
Related Terms
The earliest stage of startup funding, usually from founders, friends, family, or early angel investors.
A Y Combinator-created investment instrument that converts to equity in a future priced round.
A high-net-worth individual who provides early-stage funding to startups in exchange for equity.
Building and growing a company without external funding, using only personal savings and revenue.
The first significant round of funding for a startup, typically used to build an MVP and validate market fit.
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