Friends, family, and fools
What is an FFF round
An FFF investment round is a startup's first round. FFF stands for friends, family, and fools round. It is also called a 3F round or a friends and family round.
What is an FFF round?
An FFF round is the first money a startup raises. It usually comes before angels or a seed fund.
What is a friends, family, and fools round?
A friends, family, and fools round is the full name for an FFF round. It is a startup's first raise, usually before there is much proof.
What is an FFF investment round?
An FFF investment round is another name for an FFF round. FFF stands for friends, family, and fools round. The same round is also called a 3F round or a friends and family round.
Who invests in an FFF round?
Investors can include family members, friends, former colleagues, early customers, and other people the founder knows. Under Regulation Crowdfunding, accredited and non-accredited investors can invest. Non-accredited investors have a yearly limit.
How big is an FFF round?
An FFF round is usually smaller than a seed round. It funds a first product, first customers, or enough progress to raise from angels. Under Regulation Crowdfunding a company can raise up to $5M in 12 months.
What do investors get in an FFF round?
Investors usually get a SAFE or a convertible note. Either one can turn into shares later. Every round on Fools uses a Crowd SAFE. A Crowd SAFE converts into stock if the company later raises a priced round. It pays out if the company is acquired.
How is an FFF round different from a seed round?
An FFF round comes first. The founder raises it from people they know, usually with a short agreement. A seed round comes later and is usually larger. Angels or a seed fund lead it. They expect more traction and negotiate the terms.
How do you ask friends and family to invest?
Ask them the way you would ask a professional investor. Share a short pitch and deck, the amount you are raising, the terms, and the risks in writing. Ask each person to invest only what they could lose. Keep the ask the same for everyone.
Is it legal to raise an FFF round?
Raising from friends and family is legal under a securities exemption. Private exemptions often limit who can invest. Regulation Crowdfunding lets accredited and non-accredited investors invest. Non-accredited investors have a yearly limit. The offering must run through a registered funding portal or broker-dealer. The company must file a Form C.
What are the risks of an FFF round?
Most startups fail. An investor can lose everything they put in. The investment usually cannot be sold for at least 12 months. You'll probably never see this money again.
Run an FFF round on Fools
Fools is built for the FFF round. Founders publish their pitch, manage their pipeline of potential investors, and post updates in one workspace. Investors receive a Crowd SAFE through our licensed broker-dealer partner.