Roger Lee recently joined Anthony Domenici of Basecamp Consulting Group to answer important questions from first-time founders, highlighting how they can raise capital from friends and family. During their conversation, they dove into questions about accredited investors, possible structures founders can use, and what investing should look like, with Roger providing a lawyer’s viewpoint and Anthony one by a founder.
Roger and Anthony discussed whether friends and family are required to be accredited investors. First-time founders often seek and receive funding from friends and family, leading to misunderstandings about accredited investors. The duo shared that families and friends are not required to be accredited investors; however, founders must use proper filings and legal exemptions to utilize their investments. They went on to explain that many founders use Regulation D, Rule 506 (b), however using this regulation requires them to shoulder more responsibility.
They also answered a commonly asked question about the best structures founders should use while also providing investing suggestions. Roger and Anthony explained that many use a Simple Agreement for Future Equity (SAFE), as it is a clean and simple option for non-professional investors to understand. The duo proceed to share a valuable rule and approach that founders should keep in mind when operating in the beginning stages: “fewer investors, larger checks.” They elaborate, “a small group of aligned, well‑informed friends and family, documented correctly, almost always beats a long list of small checks and individuals who might become difficult to keep track of.”
Roger and Anthony concluded the piece by sharing that founders “don’t need a roster of accredited investors to get started. They just need the right exemption, clean documents, and a thoughtful approach to who’s on your cap table.”
