The money I wish I never took.

Why raising capital from friends and family might be the most expensive mistake you'll ever make.

I've never told anybody this story before.

It's one of the stories that affects me most about my founder journey, and I've been carrying the weight of it for years.

For my second startup, Luna, I raised a lot of capital. One of the biggest checks came from my best friend's father. He's an amazing angel investor, runs a family office, one of the UK's leading investors. A serious player who knew exactly what he was getting into.

I took a large pre-seed check from him.

And then there was my dad. He invested too – not because he understood the business model or believed in the market opportunity, but because he wanted to give me a chance. Because he loves me and believed in me.

In the end, the company folded.

Now, most people would say, "James, he knew what he was getting into. He knew the risk was incredibly high. Startups fail all the time."

And they'd be right. But what I learned from that experience is that taking money from your friends in this game adds a next-level pressure that can be absolutely crippling.

The fallout from a company folding – the impact it has on your relationships – is something I wasn't prepared for. And it's affected me more than I can tell anybody.

The guilt and unease I still feel today about this is enormous.

Taking my friend's dad's money was hard enough. But taking my dad's money? That was something else entirely.

My dad loves me unconditionally. He didn't invest because he thought Luna was going to be the next unicorn. He invested because he wanted to give me an opportunity. He believed in me, not necessarily the business.

And when it failed, there was this part of me that felt I had failed in his eyes. Not as a son – I know that's not true. But as someone he had faith in. Someone he had backed when nobody else would.

The rational part of my brain knows this is ridiculous. My dad would tell me the same thing everyone else does: "I knew the risks. Startups fail. I'm proud of you for trying."

But the emotional part of my brain? That's a different story entirely.

Every time I see my friend, there's this unspoken thing between us. Every conversation carries the weight of what happened. The company that failed. The money that was lost. The dreams that didn't materialize.

With my dad, it's different but equally complex. Our relationship hasn't been affected – he still loves me, still supports me, still believes in what I'm building. But I carry this weight of having lost his money. His hard-earned money that he gave me because he had faith in me.

And whilst that failure hasn't affected my relationship with my dad, it's meant that I've had to learn very, very painful lessons in this space. Lessons that can cause a lot of pain and heartache.

And then – and this is the part that really gets to me – I made the same mistake on a completely different scale in my next startup. I didn't learn the lessons. I took money from people close to me again.

To this day, that still bugs me. Even though we got a positive result that time, I wish I never took that money.

Even though my friend's dad knew exactly what he was getting into, I think it affected my relationship with my friend forever. It's something I deeply regret. Something I've talked to psychologists about. Something I still struggle with.

You need to be very, very careful about who you take money from.

The high likelihood is your company will fail. And therefore, the relationship might be strained. It's one of the core things I've learned from my journey, which is why I'm now mostly against raising capital at the earliest stage.

Because of the high failure rate. Because of the nature of the fact that you're dealing with people's hard-earned money. Especially at the early stage, a lot of it comes from your own network.

And it adds a whole different dimension of pressure on a founder. I found it personally crippling.

Every time you see them, you're talking about how the company is doing. It adds a different dimension to your relationship with the investor. And it also adds a different dimension to your relationship with yourself and your company.

Because I found that I had to succeed.

Now, some people will say, "Well, that's the way it should be anyway." And yes, it should be. However, there's a difference between "this has to succeed" and "this HAS to succeed."

The first is healthy ambition. The second is crushing pressure.

I had this overwhelming feeling that I couldn't just fail – I had to protect the relationships. I had to make sure that taking their money didn't ruin what we had. The fear of disappointing people who believed in me, who knew me personally, who had seen me at family dinners and birthday parties – it was paralyzing.

When you take money from strangers, from professional investors, there's still pressure. But it's business pressure. When you take money from friends, from people who know your family, who've been to your wedding – that's personal pressure. And personal pressure can destroy you.

I found myself making decisions not based on what was best for the company, but on what would help me avoid the difficult conversations. I was trying to manage relationships instead of managing a business.

And when the company failed anyway, the conversations I'd been trying to avoid became ten times worse. Because now there was all this history, all this personal investment, all this awkwardness that wouldn't go away.

It's a really hard dichotomy, and I'm wondering if there's anybody out there who has experienced this before.

Have you taken money from friends or family and regretted it? Have you felt that crushing weight of personal responsibility on top of business responsibility? Have you found yourself making decisions based on relationship preservation rather than business logic?

I'd love your thoughts on this because I'm still processing it years later.

Maybe the lesson here is that some money costs more than others. Maybe the most expensive capital isn't the equity you give up – it's the relationships you risk.

I know my friend's dad would probably tell me I'm overthinking this. That he's a big boy, he knew the risks, and business is business. My dad would say the same thing – that he's proud of me for trying, that failure is part of the journey, that his investment was an investment in me, not just the company.

But friendship isn't business. And neither is family. When you mix love and money, sometimes everybody loses – even when the relationships survive.

This is why seeing a psychologist and working through these issues is so vital for founders. This is why founders should have regular check-ups and check-ins with therapists, psychologists, coaches – somebody who's actually really good at helping you process these complex emotions.

Because without that support, you make the same mistakes again. You carry the same guilt. You let the same fears drive your decisions.

And you end up writing newsletters about money you wish you never took, years after the fact, still trying to make sense of it all.

I've chased this game for long enough. It's time to decelerate.

3 Reflection Questions for Founders Before Taking Money From Friends & Family

1. Can you handle seeing this person at family dinners, weddings, and birthdays if your company fails? Consider that statistically, your startup will likely fail. Are you prepared for years of awkward conversations, unspoken tension, and the weight of their lost money hanging over every personal interaction?

2. Will you be able to make hard business decisions when preserving the relationship becomes more important than doing what's right for the company? Ask yourself honestly: when faced with a choice between a necessary but risky pivot that might upset your investor, or playing it safe to avoid difficult conversations, which will you choose?

3. Are you taking this money because it's the best option for your business, or because it's the easiest option for you right now? Be brutally honest about your motivations. If you're choosing convenience over strategic value, you might be setting yourself up for the kind of regret that therapy can't fully fix.

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This is "Decelerate," where we talk about the stories that still keep us up at night. If you've been through something similar, I'd love to hear from you. Sometimes the hardest lessons are the ones we learn too late.