Family, friends investment can be a combustible mix

Friends, family and fools. That is where most entrepreneurs turn for their first investment dollars. But that road comes with more than a few hairpin turns that sometimes lead to crash and burn.

When we started our first software company in 1995, Barbara’s brother Douglas and his friends were many of our initial investors. That early money was critical in allowing us to build a successful company. But Neil will tell you that Douglas “made him crazy” with the weekly question sessions lasting an hour. The fact that we had a successful exit “saved the marriage.”

When Grant Farwell, now 23, had an idea for an Internet business, he turned to his father — successful serial entrepreneur Anthony Farwell — for advice and capital.

Read the rest at UT San Diego.

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