Legal considerations of friends & family financing

Beyond the founder’s personal savings and credit cards, money invested by family and friends is a fairly common approach to capitalizing a small business. But treating friends and family as “friends and family” can be a mistake, and there are legal implications that you ignore at your peril.  Find out the right way to conduct a friends and family capital raise and avoid the mistakes that can jeopardize future rounds of fundraising, risk litigation, or ruin personal relationships.

You’ll learn:

  • Why correct valuation of the business is important.
  • How to decide what type of investment your friends and family members should have.
  • How to deal with federal and state securities laws.
  • What can happen by taking money from someone who really can’t afford to lose it.
  • How to keep your family investors happy and out of your hair (as much as possible).

Cliff Ennico is an attorney and business development consultant based in Fairfield, Connecticut.  Author of 17 books and host of his own small business advice channel on Youtube. Cliff speaks nationwide to corporations, business groups and professional organizations on legal and tax issues affecting small businesses and entrepreneurs.


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