Are self-funded searchers approaching friends & family?

searcher profile

July 25, 2023

by a searcher from Carnegie Mellon University - Tepper School of Business in Pittsburgh, PA, USA

Curious to know if any other self-funded searchers have approached their family and/or friends for small investments to cover diligence and other out of pocket expenses related to their search.

https://7cncaftrkz6.typeform.com/to/GbGYejY2. See results after you answer.

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commentor profile
Reply by a searcher
from University of Pennsylvania in Los Angeles, CA, USA
Of course, happens all the time in the VC world but tread carefully as many have commented. Ultimately, they believe in you so if the business falters, were they clearly aware of the risks and are they satisfied the failure was unavoidable/not of your doing? It helps to keep them informed along the way but you definitely want to keep an arms length distance to them...last thing you need is a backseat driver in the front seat of your business.
commentor profile
Reply by a searcher
from Georgetown University in Arlington, VA, USA
I would be very carefu, and approach investments only with those friends and family that you know are savvy enough to understand these types of investments. Very clear terms and very clear risks are even more important with friends and family than institutional investors. On the other hand, if you like the deal enough to take on the risk yourself, then you should feel comfortable offering an investment to your friends and family.
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