Friends and family financing – n : a form of startup funding in which the entrepreneur asks friends and family members for investments in an early-stage business. This is frequently the first financing round for young companies – often when a company is just being launched and is still far from producing a product and generating revenue – and typically precedes financing by angels, venture capitalists and/or banks. (Referred to by some cynics as the friends, family and fools round, implying that very-early-stage companies will often raise money from anyone willing to give them money, sometimes including individuals lacking in financial acumen or venture-investing experience or perspective.)

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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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