FRIENDS AND FAMILY AS INVESTORS?
I'm researching the possibility of a search fund and I have a couple big questions about raising funds through family and friends. I have a pretty good network of high net worth individuals and most of them are family friends. It's pretty natural that they would be more likely than others to invest because of the pre-exisiting relationships, but there is also the most to lose if things go south. It's not just a business relationship on the line, but an entire community of family friends I've grown up with.
That being said, if I do pull in family and friends, are they truly the best people to involve as personal relationships can cloud sounds business decisions?
So my questions are:
1) How do you balance the relationship with F&F who are investors?
2) Are F&F necessary? Is it possible to acquire a company on bank debt and seller debt alone?
3) Are the only two options for funding the search phase self-funding and F&F investors?
Thank you in advance!