Raising money from friends and
family sounds easy until you

realize that you could
accidentally violate securities

laws and turn your closest
relationships into your biggest

liabilities. Let's break down
how to raise capital legally,

safely and smartly without
wrecking your future. Hi, I'm

Tilden Moschetti, founder of
Moschetti, syndication law, I

help syndicators fund managers
and entrepreneurs raise capital

the right way, especially when
it involves the people closest

to you. Today, we're talking
about how to unlock the huge

opportunity of friends and
family fundraising without

stepping into legal quicksand.

You raising capital

from friends and family is how
1000s of businesses and funds

get started. It's where a lot of
first time entrepreneurs and

syndicators begin. But just
because it feels informal

doesn't mean the rules go away.
In fact, friends and family

raises can be some of the most
legally dangerous ones if you

don't handle them properly. The
moment you take someone else's

money for an investment, even
your parents, your college

roommate, your dentist, you're
selling a security. That means

securities laws apply at the
federal and state level, just

like you are raising from
complete strangers, ignoring

that because it's just family is
a mistake that has cost people

their businesses, their
reputations and their personal

relationships. Now the good news
is that Regulation D and

specifically Rule 506 B gives
you a clear legal path to raise

money from your network. 506 B
allows you to raise privately

from people you have pre
existing relationships with,

including non accredited
investors, as long as they're

sophisticated enough to
understand what risks there are.

That flexibility is huge for new
funds and small businesses,

because many friends and family
investors won't meet formal

accreditation standards. But
here's a catch, you must be

extremely careful not to
advertise it publicly. No

Facebook posts, no Instagram
blast, no email blast to mailing

list, no casual mentions at
public events. Everything must

happen one on one, privately
within your established network,

the SEC looks closely at whether
you truly knew the investor

before you offered them the
deal, and whether you gave them

a full fair disclosure of the
risks involved. Full disclosure

matters just as much with
friends and family as it does

with institutional investors. In
fact, it may matter more,

because when things go wrong,
and sometimes they do, even with

the best deals, emotions run
high, the last thing you want is

a close friend or relative
claiming that you didn't explain

the risks, or worse, accusing
them you of misleading them. And

that's why a professional
private placement memorandum or

ppm is critical, even for small
raises, it protects you by

laying out the risks, conflicts
and terms clearly and formally.

Documentation is another piece
of first time fundraisers miss.

Every investor should fill out a
subscription agreement

confirming that they understand
the investment, accept the risks

and have made an independent
decision, even if you're raising

from your best friend since
childhood, don't skip the

paperwork. It's not about
distrust. It's about protecting

both of you. Handling friends
and family raises the right way

actually builds trust. It shows
you take their investment, their

monies and their all of their
trust seriously, it sets the

tone for how you're going to
handle bigger raises later. It

gives you peace of mind knowing
that no matter what happens, you

did everything right up front.
Friends and family can be your

greatest asset when raising your
first rounds of capital, they

believe in you personally, but
belief sometimes isn't enough.

You have to respect the law,
respect the process, and respect

the responsibility that you're
taking on with their money. When

you do that, you don't just
raise capital. You strengthen

relationships that will support
you across your entire career.

Raising money from friends and
family is an incredible

opportunity, but only if you
treat it with the

professionalism and seriousness
it deserves. Protect yourself,

protect your investors and build
the foundation for a lifetime of

successful capital raising. If
you. Help setting up your

friends and family round the
right way, reach out. I'm Tilden

Moschetti, thanks for watching,
and let's build something that

lasts you.