How it works

Early capital is high-risk, relationship-driven, and regulated. Fools, the friends, family and fools round, exists to make the process clearer, not easier to ignore. Failure rates are high. Only money that can be lost entirely belongs here.

Four steps

  1. 01

    The founder writes the pitch

    Video, skin in the game, receipts, terms. In the founder's own words. Fools drafts nothing.

  2. 02

    Backers watch in the screening room

    Newest, closing soonest, alphabetical. No default order, by law and by choice.

  3. 03

    Backing starts with the risks

    One checkbox per statement. Your limit in one sentence. The cancellation window on screen the whole time.

  4. 04

    Money moves through a licensed partner

    Escrow, identity checks and filings run on a registered portal's rails. Fools never holds funds.

The friends, family and fools round

The oldest name for a first raise is the friends, family and fools round: the checks that arrive before any institution, from people backing a founder they believe in. That phrase is where our name comes from. On Fools, the people who write those checks are simply backers, and the discipline is sizing: only money they can afford to lose entirely.

Fools widens who a backer can be, beyond blood relatives and close friends to weak ties, former colleagues, alumni, mentors, customers and industry acquaintances, without pretending any of them are venture funds.

How a real raise works

Neutrally stated. Not legal advice. Fools does not provide investment advice, recommend offerings, or act as a broker. Consult your own securities counsel. Real offerings run through a registered funding portal or broker-dealer under Regulation Crowdfunding.

Rounds close under Regulation Crowdfunding (Reg CF), the one US exemption built to let ordinary, non-accredited people put small amounts into early-stage companies. A company can raise up to $5M in a 12-month period from the public; each backer's limit is set by their income and net worth.

  1. A licensed intermediary is mandatory.Every Reg CF raise runs through a registered funding portal or broker-dealer of record. Fools builds the founder workspace and the backer experience on top of that licensed partner's rails.
  2. Public disclosure.The company files a Form C on the SEC's public database and sets its Crowd SAFE terms (valuation cap and/or discount).
  3. Escrow, all or nothing.Backers' funds sit in escrow at a qualified bank or broker-dealer and only release if the raise hits its target by its deadline; otherwise every commitment is returned. Backers can cancel until 48 hours before the close.
  4. Compensation, when there is any, flows through the license. Fools is uncompensated for the pilot round. The fee shape for later rounds is not set and will be confirmed with counsel. It will never be a fee for advice or for picking companies.

Rule 506(b), for a small group

If your backers are a handful of people who already know you, a Rule 506(b) private placement may fit better than Reg CF: no funding portal and no Form C, but sales only to people who meet the SEC's accredited test plus up to 35 non-accredited people who receive disclosure, and no general solicitation. Which path fits is a question for your counsel. The intake on Start a round asks which one you are considering so the workspace can show the right checklist.

What a Crowd SAFE is

Valuation caps, discounts, conversion, a dilution calculator, and how a Crowd SAFE compares with a convertible note and priced equity. What a Crowd SAFE is

Risk, stated plainly

Investing in early-stage companies is extremely risky. You should only commit capital you can afford to lose entirely.

Crowd SAFE templates and terms shown here are illustrative samples only. Real legal documents and qualified securities counsel are required before any actual investment.

Know the risks