It is a knee jerk reaction from me to ask anyone considering raising funds; Do you really need to?
Keep in mind, that question is coming from a guy who owns a funding platform and built a seven figure professional services business that helps people raise funding.
I can give you plenty of perspective on what a friends and family round looks like - what the pitfalls are - what the advantages are - how to structure the deal - but the first thing I always challenge people to do is tell me why they can't do it without the funding.
Generally people will initially respond with capital expenditures that MUST be made to proceed (buying a building, developing the software, manufacturing their first run of widgets, salary so they can quit their day job). However, they only MUST be made when thinking of the FINAL state of the business - and building it like a house, start to finish, in sequential stages that see ALL the framing done, and ALL the plumbing done, and ALL the finish carpentry done. While this is a perfectly good method for building a house - since you can't really reside in a partially completed one - its a flawed approach to building a business.
You can start with a single small part of the business - or in cases where the final product you want to sell really does require a large capital expense to put into market, use a proxy.
If we return to my housebuilding example - a proxy in that case would be also pitching a tent on the property. It isn't the dream house you want to live in - but it provides some of the benefits and will get you closer to your dream house (you can enjoy the yard!).
In the case of starting a business there is nearly always a similarly useful proxy. Imagine you want to start a company that builds a software to solve accounting issues specific to farm-to-table vendors in a local market setting.
You could start by raising funds and fully developing the software and then doing marketing to uncover effective channels for distribution and then developing your funnel to convert leads produced into sales...
Or, you could start by creating a small consultancy to help that same niche population setup their accounting systems. Or, even smaller - a digital information product like an e-book, online course, or webinar that teaches them some specific best practices for handling their accounting.
This allows you to get started working with your target population much faster, and much more cost effectively - while also forcing you to get in front of real customers and work with them to truly understand the pain that your "dream house" solution will eventually solve at scale. It will ensure that you've gotten the dream right - and avoid building something in the lab that may not stand the test of the real market needs.
Not the answer you were expecting I'll assume - and the offer still stands for advice on the F&F round, but I can never in good faith give people advice about fundraising without first exploring and validating the need.
