Regulation CF for non-accredited friends and family round?

Hi folks!

So a persistent question in this space is what to do about non-accredited investors. You're in a position where you need some money to get to proof-of-concept or MVP but you don't have a rich uncle, grandparent, or neighbor who meets the accreditation threshold and is willing to put down $ 50k on your idea. But you do have some friends and family that have a few thousand dollars lying around and think you idea is brilliant!

The common refrain here is then: get thee to a lawyer! Which, ok, sure, I understand the need, but if there is no money to pay for some proof-of-concept materials there likely isn't the thousands of dollars to pay for a lawyer. The other option is to just informally write up your own SAFE or CN and hope for the best. At best these will need to be unwound at a later more critical time (like a Series A or IPO) or, at worst, you've accidentally committed securities fraud.

The other legal alternatives that tend to be offered are either: just have them gift you the money, or raise it through a product crowdfunding campaign. This kind of misses the mark though; these people believe in your idea because they think it could lead to a profitable company and a return to them. I've heard vaguely about Regulation CF, but recently started investigating the websites that facilitate it, and this seems to be a solution to this (my) problem. You can solicit in your network and get confirmations, but formally execute the transaction via Reg CF and do so legally.

What's everyone's thoughts on this?

Edit: to be clear, I'm not looking for legal advice, just fundraising advice. Has anybody else used Reg CF for friends and family? Am I grossly overthinking this?

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[Future Family in WebWire] CCRM Fertility Partners with Future Family to Expand Access to World-Class Fertility Care with Easy Monthly Payment Plans

CCRM Fertility, a global pioneer in fertility science, research and treatment, today announced an alliance with fintech company Future Family, the leading provider of affordable fertility plans for in vitro fertilization (IVF) and egg freezing patients. This partnership will allow CCRM Fertility patients to access care starting at just $ 350 a month, with the goal of making it easier for more patients to move forward with cutting-edge fertility treatments.

Read more here.

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Jon Lender: Connecticut’s new family leave authority criticized over slow startup and quick payday for Democratic operative – Hartford Courant

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Family media app Kin launches in the UK with €2.6 million funding and valuation of €20.6 million

Today Kin, a private social network app for families, launches with around €2.6 million in pre-launch funding – one of the highest private network raise in Europe ever at the time of launch. The app is entering the market with a valuation of around €20.6 million. The Kin app provides an alternative to the predominant…

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Starting a Family Business? Avoid These 5 Mistakes in Your Continuity Plan

The following is excerpted from “The Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise” by Josh Baron and Rob Lachenauer (Harvard Business Review Press, 2021).

It may seem counterintuitive to those who are neck deep in building their business, but if you want to build an enduring legacy to pass to the next generation, it’s never too early to start your continuity planning.

Even with good intentions, many owners find it difficult to plan their own eventual transition from the business that has become part of their identity. But delaying or poorly planning your transition can wreak havoc on the business (and the family) in the long run.

A BCG study of more than two hundred Indian family businesses found a “28-percentage-point differential in market capitalization growth between companies that had planned transitions and those that had not.” The study concludes, “An enormous amount of value is destroyed by unplanned transitions, with potentially catastrophic consequences for the business.”


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While there is no correct way to make the transition from one generation to the next, we have seen five main approaches that are likely to fail. If you identify with one—or more—of these scenarios, you are likely to be headed off the continuity cliff.

A problem patriarch or matriarch

This type of leader can’t let go. Patriarchs or matriarchs rule all aspects of their family business with an iron fist. Their hardball behavior, which led to their business success, is applied to the next generation, which finds it impossible to thrive under an iron-fisted senior leader. Because of this person’s oppressive behavior, the members of the next generation are incapable of leading the business or are so hurt by their previous experiences that they have no interest in continuing the business. Often, after the domineering leader leaves, they sell the business.

The one-size-fits-all fallacy

Governance, roles, and processes that worked brilliantly in one generation can be a disaster in the next. Even with good intentions, the senior generation can set the younger generation up for failure by maintaining rigid leadership roles without allowing the younger group to consider approaching leadership differently. Each generation brings different interests and skills to leadership—and the business itself may need different leadership skills. It’s a mistake to assume that what worked for one generation will be right for the next generation, too.

Ruling from the grave

Owners can set the rules by which the next generation will work and own the business together, often through formal vehicles like wills or trusts or through handed-down cultural expectations. The goal is often to protect what you have created and to help the next generation avoid mistakes. However, these formal approaches often backfire. Ruling from the grave removes the autonomy of the next generation to chart its course and to respond to changing circumstances. Trusts are very difficult to undo, and even cultural expectations are hard to shift.



The chosen one

Many families have a cultural tradition that even when ownership is shared, the eldest male is put in charge of the family business. Sometimes, this person is given a greater ownership stake in the company (or all of it), and sometimes the power comes from being tapped on the shoulder by the previous generation. This tradition can help avoid battles over succession, since everyone knows their role at a young age. But more often than not, we have found that designating a successor at birth causes more problems than benefits. Even if it’s not spoken aloud, everyone will recognize that the chosen successor may not be the best candidate for the job—that this person simply has the luck of being born first. This approach also places great pressure on the “chosen one.” Meanwhile, the rest of the family often feels disengaged and resentful.


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All for none, none for all

When the current owners disagree on priorities, the individuals often want to compete with each other rather than collaborate. One way this competition happens is succession by attrition. For example, a “last one standing” provision in a shareholder agreement states that if, say, a company has three shareholders and one dies, then the two remaining shareholders must buy the shares from the surviving spouse at a discounted price. If a second shareholder dies, then, again the remaining shareholder is the buyer. The last person standing now probably owns all of the business, but because the business is likely to be heavily indebted, the last person will probably need to sell, too.

Maintaining family ownership over the years is a complicated endeavor. It requires making decisions that will reverberate for years to come and that are based on imperfect information about the future (e.g., which of the next generation will be the most qualified to lead the business?). These decisions are steeped in meaning, connecting to issues of fairness (do I treat my children equally?) and identity (what do I do after I have exited from my life’s work?).

To make a good transition, you need a continuity plan that maps out the path from the current generation of ownership to the next. Though the current owners will make the final calls, the process requires cross-generational collaboration skills. Everyone needs to understand how this transition will work. Family empires are consolidated or squandered in the transfer of power to younger generations.

We can’t state this strongly enough: a planned transition is far better for both the business and the family in the long run.

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[D-ID in TechCrunch] MyHeritage now lets you animate old family photos using deepfakery

AI-enabled synthetic media is being used as a tool for manipulating real emotions and capturing user data by genealogy service MyHeritage, which has just launched a new feature — called “deep nostalgia” — that lets users upload a photo of a person (or several people) to see individual faces animated by algorithm.

Read more here.

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Arlington Family Partners leads $4.5M funding round for Atlanta startup – Birmingham Business Journal – Birmingham Business Journal

Arlington Family Partners leads $ 4.5M funding round for Atlanta startup – Birmingham Business Journal  Birmingham Business Journal
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