You've got a great idea for a startup, but so far it's just an idea. You'd like some seed funding to buy you some time and perhaps let you bring in one or two other people to help you figure out how to turn your brilliant idea into a real-live successful business. Luckily, you have successful friends or well-off family members who are willing to take a chance on you and invest some money to get you off the ground.

What do you do next? Many company founders are so grateful for the support and confidence being shown in them that they willingly agree to any terms their F&F funders suggest. That can be a big mistake, says Alicia Navarro, co-founder of Skimlinks, an affiliate marketing tool that allows publishers to more easily monetize their content. Navarro started her company with F&F investments, and went on to raise more than $25 million in VC funding. Agree to the wrong terms, and it can hamper your ability to raise funds later on, she warns.

Here's her advice for F&F seed funding investments that are a good deal for everyone concerned:

1. Don't get emotional.

Don't let your gratitude overwhelm your judgment, and don't play on your relationship or their feelings to persuade friends and family that they should give you their money. "F&F don't want to feel emotionally manipulated into funding your dream," she says. "You need to position it as a good business decision, and give them room to make up their minds on that basis."

Nevertheless, she notes, "at this stage, the decision to invest in your startup is going to be almost entirely based on their belief in you as an entrepreneur." After all, new startups nearly all go through changes and iterations along the way, so there's an excellent chance the company you're running a year from now will be substantially different from what you're planning today. 

"What they're evaluating isn't so much your business plan, but the logic, analysis, acumen, passion, and desire to succeed that you exhibit while presenting  your business plan," she explains. "Be mindful of that when you pitch to them."

2. Be clear about exactly what you're offering.

Before you ask F&F to invest, have it clearly laid out exactly what they'll be getting for their money. "At that early stage, I recommend structuring it as a convertible note with a discount on conversion during your priced seed round," Navarro says.

A convertible note is a loan that, instead of paying interest, will convert into stock in your company at some point in the future, usually when you raise your next round of funding. Giving investors a promissory note as opposed to actual stock vastly simplifies the paperwork involved and allows you to put off the delicate matter of setting a price for shares in your company. Though convertible notes have their disadvantages, they're often a good solution for a small round of funding raised from people you know.

The discount upon conversion is your reward to your F&F for having bet on your company early. Typically, you will give these early investors20 percent off the price of shares that later investors pay. In other words, when the note converts, you will give F&F 20 percent more equity for the money they put in than you would to new investors who invest the same amount.

3. Leave the lawyers out of it.

Legal simplicity is one of the key advantages convertible notes have over shares. "A simple email with bullet points on how their investment will become equity is fine, as long as your word means enough to them," Navarro says. If they do ask for more formal paperwork (which you should not take personally), you can use publicly available templates to draw up a contract. At early funding stages, legal fees can take up a big chunk of your available funds so this is a significant advantage.

4. Avoid giving away any control.

Traditionally, VC investors negotiate protections when they invest. These might include a seat on your board, information rights, and anti-dilution provisions that limit how much stock you can issue in the future.

That may make sense when sophisticated investors are providing you with a multi-million-dollar funding round, but if you give these kinds of powers to your F&F, you may well live to regret it. "It will make later seed rounds or A rounds much harder to obtain if there is any complexity or rights built into the F&F round," Navarro says. 

In the normal course of events, she adds, if your company is successful, your F&F will become silent investors who have a stake in your company but no control over how it's run. "A good discount should be sufficient at this stage," she says.