Tapping personal ties to raise cash for a company that's either too new or too small to get financing elsewhere is an age-old formula that still makes sense. But here's one risk too big to ignore in today's highly competitive capital marketplace: if you don't follow professional standards in structuring and documenting "F&F" loans or equity arrangements, your sloppiness will likely come back to haunt you.

That's because if and when your company grows to the point at which it can credibly approach banks or professional investors for funds, their lawyers will examine your corporate and capitalization structure with a fine-tooth comb. Even in the best of times, the lenders would delay the closing of any deal until errors or inconsistencies got cleaned up. In today's market that could mean you'd wind up losing opportunities altogether. Paying a lawyer now is a cheap way of avoiding problems later.