by Panxora Fund GP Marcie D Terman

The first steps in launching a token project are always the trickiest. You’ve got a vision, a draft whitepaper, maybe a couple of people around you who believe in it as much as you do. What you don’t have yet? The money to make it real. That’s when most founders turn to the obvious place — friends and family. They already know you, they trust you, and they’re usually willing to write that first cheque when no one else will. It feels natural. But here’s the catch: friends and family money isn’t clean capital — it comes bundled with expectations you might not be ready for. If you don’t set it up properly, those early “easy” steps can turn into the hardest ones you’ll ever take.

Why Friends & Family Feels Safe (But Isn’t)

The thing about friends-and-family rounds is they look deceptively simple. You’re not pitching to strangers, you don’t need a perfect deck, and you can raise the money fast.
But under the surface, this “safe” round is full of hidden traps:
1. Unspoken Expectations. Aunt Junebug might not ask for a term sheet, but you’d better believe she’s picturing her holiday money turning into a house deposit. That expectation doesn’t vanish just because nothing’s in writing.
2. The Thanksgiving Problem. Professional investors wait for quarterly updates. Family investors ask for updates every time you pass the potatoes. And the question is always the same: “How’s that crypto-thingie doing?”
3. The Messy Cap Table.  When everyone’s in at different amounts, with no structure, it can get ugly fast. Try explaining that to an institutional investor later down the line and watch how quickly they decide to invest in the next founders they have scheduled to meet.

How to Take Friends & Family Money the Right Way

The good news is, you don’t have to avoid friends and family entirely — you just need to treat them like real investors.

• Put it in writing. Even if it feels awkward, clear terms now save painful misunderstandings later and they’ll appreciate it.
• Be honest about risk. Tokens can go to zero. Say it out loud. If they’re not comfortable with that, they shouldn’t invest. It just isn’t worth the bad feelings.
• Keep it clean. Use a simple structure, not a patchwork of promises. Future investors will find that level of professionalism a plus.

Baby Steps That Set You Up to Run

Your first raise sets the tone for everything that comes after. If you handle it sloppily, you’re dragging baggage into every conversation with future backers. But if you handle it with clarity and discipline, you’re signalling you’re a founder who knows how to play the long game. Friends and family can be the launchpad — or the landmine. The difference is whether you treat that money like a gift… or like the foundation of a business.

So take those first steps carefully. They may feel small, but they’re the ones that decide how far you’ll get.