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A family member wants to angel invest but at an amount less than the suggested minimum of $10k. Is $10k the suggested amount strictly as an anchoring tool or is there additional reasoning behind it?

Mia Scott avatar
Written by Mia Scott
Updated over 4 years ago

As long as this person is an ‘accredited investor’ they can invest any amount, especially if this is a Friends & Family round. However, the advice is to not have lots of small investors, mostly because as a CEO you will then have lots of personalities to deal with which matters when you need shareholder votes/approval.

The more small checks that you take, the more complicated your cap table becomes and the more signatures you need to wrangle for financing and getting stockholder consent. Also, if you're paying a law firm to manage your cap table in Carta or otherwise, each additional person creates more billable time no matter the amount that person invested.

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