Friends & Family Funding While Raising Capital for Search Phase

by a searcher from Babson College - F.W. Olin Graduate School

5 months ago

I’m in the early stages of reaching out to investors to raise capital for my search fund. I've been advised that some investors might express interest but are fully allocated for 2024, and may ask me to wait until###-###-#### While I’d prefer not to wait, I'm exploring ways to bridge this gap.
Several family members and friends are interested in investing, but my lawyer has cautioned against accepting more than 10% of my funds from investors unfamiliar with search funds, as this could scare off traditional search fund investors.
Does anyone have suggestions for structuring agreements with friends and family to fund my search through the remainder of 2024, in a way that won’t scare off traditional investors, dilute equity, etc.?

1 like
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10 comments

searcher from University of California, Los Angeles

Thanks for the tag, Luke. I agree with what's been answered on this thread. Take the money and put together a plan for other investors. Let them know that you have 10 (or however many) tickets available. You're selling a 'piece' of you, and this means that only 90% of what you need is left for other investors. I don't see a problem with it. Best of luck

4 months ago | like reply | 0 likes

searcher from Yale University - School of Management

Echoing the sentiments above, I believe capital is still available.

5 months ago | like reply | 0 likes

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