Friends and Family Rounds

Term Main definition
Friends and Family Rounds

Capital provided by the friends and family of founders of an early stage company. Usually the founders receive their founders' shares well before the friends and family round begins. Friends and family's ownership of some of the company does not necessarily enhance or detract from the attractiveness of the company to investors. The friendly, family nature of a friends and family round should not lull you into the mistake of forgetting to treat this as a probably a securities offering and, with few exceptions, a significant transaction of the company deserving legal attention.