Re:Well, We Failed – Wattage is shutting down
by daenz on Tuesday May 05, 2015 @03:34PM
(#9494441)
I'm astonished at the amount raised from "friends and family." If my network of people I can ask is 250 people (a lot!), and my success rate for securing some amount of money is 10%, the average amount contributed per person is $10,000. Maybe it's my modest means speaking here, but that's an insane amount.
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Re:Well, We Failed – Wattage is shutting down
by billyhoffman on Tuesday May 05, 2015 @04:22PM
(#9494716)
It's not "Friends and Family." It's "Friends and Family who qualify as accredited investors." (at least in the US).
An accredited investor is "someone whose net worth exceeds $1M not including their primary residence." The vast majority of people are not accredited investors because they cannot use their house as part of their net worth.
This is not your extended family giving you a $500 or $1000 to pursue your dream. These are wealthy people who know what they are doing, and are putting in several thousand if not tens of thousands of dollars each.
Friends and family are allowed to invest in a company without being an accredited investor. The rule about accredited investors involves soliciting investment from the general public. Rule 504 allows a company to raise upwards of 1 million dollars over a 12 month period from non-accredited investors so long as that money is raised from pre-existing contacts, that is no general solicitation is made.
If you have the sort of friends and family who will put up $50k, this is much more achievable, no? (I have no idea what sort of situation the poster is in, but F&F rounds can certainly go higher than $250k).