Friends and family round: how to raise your first €50,000

Your aunt offers €10,000. A former boss says he’d put in twenty. A friend from university wants in with fifteen. Wonderful news, until someone asks the obvious question: in exchange for what, exactly?

This guide shows how to run a friends and family round properly in Italy, and where else the first €50,000 can come from: business angels, accelerators, equity crowdfunding and public money. In a few minutes you’ll know what each source expects, what you have to sign, and how much of your company it costs.

Where can your first €50,000 come from?

There are six usual sources, and most founders end up mixing two or three. The table puts them side by side; the sections below explain each one.

Source	Typical ticket	What they want	Paperwork in Italy	Dilution
Your savings	What you can afford	Nothing, but investors will ask about it later	None beyond your own capital contribution	None
Friends and family	What they can afford to lose (no reliable data)	Trust in you and an honest plan	Capital increase minuted by a notary, or a written shareholder loan	Set by the price you agree
Business angels	€200,000 to €1.5M per deal (Italian Angels for Growth)	A prototype, early traction, full-time founders	Term sheet, investment agreement, capital increase	Negotiated on a valuation
Accelerators	€70,000 to €200,000 at pre-seed (CDP VC network)	A startup past the prototype stage	Selection, programme agreement, equity investment	Equity, terms set by each programme
Equity crowdfunding	About €700,000 per campaign on average (2024)	A product the public understands, a community	Offer on a Consob-authorised platform	Many small shareholders
Grants and public loans	Depends on the programme	A credible business plan, eligibility	Application to the managing body	None

Start with your own money, even a small amount. Every investor you meet later will ask how much you put in yourself, and a founder who has risked some savings tells a better story than one who hasn’t.

How does a friends and family round work in Italy?

Three routes are common, and which one fits depends on what your friends want. Some want shares. Some want their money back. Some can’t say yet.

1. They buy quotas: the capital increase

This is the cleanest way. The shareholders decide to increase the SRL’s capital, and because that changes the articles of association, the minutes are drawn up by a notary. Existing shareholders have the right to subscribe the new quotas first, in proportion to what they own; offering them to outsiders requires the articles to allow it or the existing partners to step aside. At subscription the new investor pays at least 25% of the nominal amount and the whole premium.

The premium is where most first-timers trip. Say you and a co-founder own an SRL with €10,000 of capital, and your aunt offers €20,000 for 10%. That values the company at €200,000 after her money (the post-money). She subscribes €1,111.11 of new nominal capital plus €18,888.89 of premium. Without a premium, her €20,000 at face value next to your €10,000 would hand her two thirds of the company. If pre-money and post-money still sound abstract, our guide to pre-money and post-money valuation walks through the sums.

2. They lend: the shareholder loan

Some relatives would rather lend than own. A shareholder loan avoids the notary, but it comes with a catch: under article 2467 of the Civil Code, repayment ranks behind other creditors if the loan was made when the company’s debt was excessive compared with its equity, or when a capital contribution would have been the reasonable choice. That can easily describe a young startup with little capital. Lending to companies is also regulated, so have an accountant set up the loan and check who can make it.

3. They decide later: a convertible agreement

The money arrives now and turns into quotas at the next round, usually at a discount or with a cap on the price. It postpones the valuation argument. The American SAFE doesn’t fit an Italian SRL as it is, so these agreements are drafted case by case by a lawyer.

Whatever the route, tell people plainly they could lose everything, write down what happens at the next round, and never take money that would hurt someone if it disappeared. Family dinners last longer than startups.

Business angels: the first professional cheque

A business angel invests personal money in exchange for equity and, at best, brings experience and contacts too. In Italy many invest through organised networks. Take Italian Angels for Growth, founded in 2007: by its own account, its members put €200,000 to €1.5 million into each deal. It looks for a prototype and early traction metrics, wants founders working full time, takes applications through the Dealum platform, and ends up investing in 2% of the startups it examines.

So angels can cover your first €50,000 and a lot more, but the bar is high. Our guide to business angels in Italy explains how the main networks work and what they expect in a first meeting.

Accelerators: a small cheque plus a programme

An accelerator invests a small amount and gives you a few months of structured support, in exchange for equity. In Italy the largest network is backed by CDP Venture Capital, whose Fondo Acceleratori (€254 million) supports 20 vertical accelerators launched since 2020 across the country, in sectors from automotive and aerospace to food and fintech. The typical pre-seed ticket is €70,000 to €200,000, with possible follow-on investments of about €200,000 to €500,000 at seed. You apply on each accelerator’s own website, and each batch takes 8 to 10 startups.

Abroad the reference model is Y Combinator. It invests $500,000 in total: $125,000 on a post-money SAFE for 7% of the company, plus $375,000 on an uncapped SAFE with a most-favoured-nation clause. A SAFE is a contract that turns into shares at the next priced round. Our page on CDP Venture Capital covers the Italian funds and accelerators in detail.

Equity crowdfunding: many small investors at once

With equity crowdfunding you sell quotas to the public through an online platform. The EU regulation on crowdfunding service providers has applied in full since 2024. In Italy, Consob and the Bank of Italy authorise the platforms. By the end of 2024, 27 were authorised. That year 161 campaigns ran, and 86.1% of them succeeded. Together they raised €112.38 million.

Crowdfunding suits products ordinary people get at first glance and like to talk about. The price: a long list of small shareholders you’ll keep informed for years. Before you pick a platform, read our guide to equity crowdfunding in Italy.

Public money and the tax break investors ask about

Grants and subsidised loans don’t cost you any equity. What they do cost is time and paperwork, and quite a few reimburse spending you’ve already made instead of paying upfront. Under 35? Start with our overview of grants for young founders in Italy.

Then there’s the tax break. If your company is registered as an innovative startup, an individual who invests in its capital can deduct 65% of the amount from personal income tax, on up to €100,000 per tax year, and must hold the investment for at least three years. The startup can receive at most €300,000 of this aid over three years, and its legal representative has to file a request on the MIMIT platform before the investment is made. On your aunt’s €20,000, that’s a deduction of up to €13,000. The other regimes are in our comparison of investor tax breaks in Italy and the US.

Before you accept the first euro: a checklist

1. Write down what the money must prove, and by when. That sets the amount.
2. Settle on a valuation before a single euro moves, even a rough one.
3. Quotas, a loan or a convertible: pick one, and see a notary or lawyer before you promise anyone a percentage.
4. Write the terms down, and say what happens at the next round.
5. If you’re a registered innovative startup, file the MIMIT tax incentive request before the money arrives, not after.
6. Keep a simple table of who owns what, updated after every deal.

On our beginner’s map from zero to a first round, the step before this one is learning to describe your startup in one sentence, and the next is understanding what investors look for in a first-time founder. When you’re ready to go beyond your own circle, read how to find investors for a startup and our guide to raising capital in Italy.

This article is general information, not legal or tax advice. Rules change: check the official sources or ask a notary, lawyer or accountant before you take money from anyone.