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The Easiest Money You'll Ever Raise
- Steve Walsh
- Jul 1
- 3 min read
A lesson from the first $125,000 I ever raised.
A few years ago, I was raising capital for one of my own tech startups.
Like most founders, my first instinct was to start chasing angel investors.
I thought about warm introductions.
I thought about networking.
I thought about convincing complete strangers to believe in my vision.
Then I stopped.
Instead, I wrote a single email.
Not to investors.
To ten people I already knew.
Friends.
Former colleagues.
People I'd worked alongside for years.
That one email resulted in $125,000 in commitments.
It wasn't because I had the perfect pitch deck.
It wasn't because I had incredible traction.
It was because those ten people already knew something every professional investor was still trying to figure out.
They knew me.
Professional Investors Bet on Companies. Friends & Family Bet on You.
One of the biggest mistakes I see founders make is trying to skip the Friends & Family round.
They'll tell me:
"I don't want to ask friends for money."
"I don't know anyone wealthy."
"I'd rather raise from professional investors."
I understand the thinking.
But here's the reality.
Professional investors don't know you.
They've never worked with you.
They've never watched you handle adversity.
They've never seen your work ethic.
You're asking complete strangers to make a seven-to-ten-year bet on someone they've never met.
That's an incredibly difficult ask.
Your inner circle doesn't have to decide whether they believe in you.
They've already made that decision.
Now they simply have to decide whether they believe in what you're building.
Those are two very different conversations.
The easiest money you'll ever raise isn't from the people with the most money. It's from the people with the most trust.
Your Friends & Family Round Is Bigger Than You Think
When founders hear "Friends & Family," they picture a rich uncle.
That's rarely what it looks like.
Think bigger.
Former coworkers.
Old bosses.
College classmates.
Neighbors.
Industry contacts.
Customers you've helped.
People who've watched you execute over the years.
Some of the best Friends & Family rounds I've seen had very little family involved at all.
The common denominator wasn't DNA.
It was trust.
When you reach out, don't oversell.
Tell people exactly what this is.
Tell them startups are risky.
Tell them not to invest retirement money or their kids' college fund.
Then tell them why you're reaching out.
"I believe we're building something special. Before we take this opportunity to outside investors, I wanted the people closest to me to have the chance to participate if they're interested."
That's an invitation.
Not a sales pitch.
If they invest, fantastic.
If they don't, nothing changes.
No awkward family holidays.
No damaged relationships.
The Signal Most Founders Miss
There's another reason I encourage founders to raise a Friends & Family round.
It has nothing to do with the money.
It has everything to do with signaling.
Professional investors are evaluating your company.
But they're also evaluating you.
Can you inspire confidence?
Can you communicate a vision?
Can you convince people to follow you?
If the people who've known you for years aren't willing to write the first checks...
...why should complete strangers?
A successful Friends & Family round tells future investors something incredibly important:
Other people believed in this founder before I ever met them.
That's powerful.
It's often the first validation you'll ever receive as an entrepreneur.
So don't think of the Friends & Family round as something to get through.
Think of it as the first fundraising milestone every founder should master.
Because if you can't convince the people who know you best...
Convincing strangers only gets harder.
Next week: We'll move into the next stage of fundraising—the Pre-Seed round. We'll talk about who to target, how much to raise, and what professional investors expect before they'll write that first institutional check.
Until next time—keep building.
Cheers,
Steve Walsh
Hands On Angel
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