Knowing that you have “friends and family” money to get going or even some family money to help you when you fail makes it that much easier to be more risk-seeking and build the appetite for hyper-growth startups.
Privilege and inequality in Silicon Valley
Ricky Yean
2.9K165

It is interesting that we consider the pre seed round to be a simple matter of asking for tens of thousands of dollars from our friends or family. I’d be interested to see if there is a study that looks at the bottom 20% on the socioeconomic scale and compiles what would be there average number of friends and family members, then multiplied by that groups average potential disposable/investable capital. Without that data, all I can do is guess that it would not be enough. The key in that situation would be to leverage any and all connections to find second or third tier connection to potential seed investors, in which case we should really be referring to this initial fundraising as the “Network Round”. It’s certainly more PC, and a more holistic understanding.

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