The family member has to be an "accredited" investor, which means they have at least a million dollars in liquid assets, not including home.
You might consider convertible debt here, so that you don't have to set a valuation now. Instead, it converts to stock possibly at some discount to and possibly at some valuation cap from whatever gets negotiated with a VC later. This makes life easier. The cap could be in the 500k - 3m range, depending on how much work you've got done.
I do get the impression that caps and discounts do annoy VCs, as well.
(Personally, I don't like doing converts -- I just want to place the bet. I've done ~ 7 angel investments, including one or two YC companies.)
Other people are wary about lending to family. I would tread very, very carefully here.
The family member has to be an "accredited" investor, which means they have at least a million dollars in liquid assets, not including home.
You might consider convertible debt here, so that you don't have to set a valuation now. Instead, it converts to stock possibly at some discount to and possibly at some valuation cap from whatever gets negotiated with a VC later. This makes life easier. The cap could be in the 500k - 3m range, depending on how much work you've got done.
I do get the impression that caps and discounts do annoy VCs, as well.
(Personally, I don't like doing converts -- I just want to place the bet. I've done ~ 7 angel investments, including one or two YC companies.)
Other people are wary about lending to family. I would tread very, very carefully here.