One approach is to raise the funds in the form a "convertible note", which is basically a loan that converts to equity when you raise your first round of financ

One approach is to raise the funds in the form a "convertible note", which is basically a loan that converts to equity when you raise your first round of financing. Rather than interest, you give investors a discount (20% is typical) on the conversion. (e.g. If your price per share is $1.00 when you raise your next round, the notes convert by paying on $.80 per share). One other comment is that, if you can, it's better if your friends and family investors are experienced investors (not necessarily with angel experience). It makes things easier if they understand the risks and have the means so that if they lose their investment, it won't be a hardship for them. Good luck.