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It's not "Friends and Family." It's "Friends and Family who qualify as accredited investors." (at least in the US). An accredited investor is "someone whose ne
by billyhoffman 11y ago
It's not "Friends and Family." It's "Friends and Family who qualify as accredited investors." (at least in the US).
An accredited investor is "someone whose net worth exceeds $1M not including their primary residence." The vast majority of people are not accredited investors because they cannot use their house as part of their net worth.
This is not your extended family giving you a $500 or $1000 to pursue your dream. These are wealthy people who know what they are doing, and are putting in several thousand if not tens of thousands of dollars each.
- Kranar 11y agoFriends and family are allowed to invest in a company without being an accredited investor. The rule about accredited investors involves soliciting investment from the general public. Rule 504 allows a company to raise upwards of 1 million dollars over a 12 month period from non-accredited investors so long as that money is raised from pre-existing contacts, that is no general solicitation is made. http://www.sec.gov/answers/rule504.htm http://www.sec.gov/answers/rule504.htm