- Many entrepreneurs raise seed money for their startups through friends and family funding.
- Friends and family generally offer better terms and demand less oversight than most institutional investors, which is the appeal of this kind of seed round.
- The cofounders of Doorvest, Andrew Luong and Justin Kasad, avoided the discomfort by texting their loved ones an invitation to invest.
- They received over $128,000 through 23 different friends and family investors. After opening up Doorvest to institutional investment, the startup raised $1 million in total pre-seed funding, according to a spreadsheet shared with Business Insider.
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Founder Andrew Luong knew that he and his business partner, Justin Kasad, were onto something with their startup idea, Doorvest. The company helps users own high-yield, single-family rental homes by streamlining the process of researching, acquiring, renovating, and then renting a property.
When the two decided to raise