So you’re leading a pre-revenue tech startup and you need funding to build your company. You’ve done the research, you have a product and a solid team, you’re leaving your day job. But institutional investors typically don’t back a pre-revenue Internet consumer company. So how do you raise a seed round?

You find another way.

That’s what Jody Porowski did when she chose to raise Avelist’s seed round from non-institutional sources.

A (Very) Brief History of Avelist

In April, ExitEvent’s Jake Finkelstein wrote about Jody in an article on when to quit your day job and go all-in with your startup. Since she left SAS, Jody and her team have been hard at work on Avelist, a list-sharing website that helps people share and discover organized, trustworthy information. Lists range from top local restaurants to tips for buying a house to users’ favorite quotes. I have a list of top startup news sources. (Hint: ExitEvent is numero uno.)

Avelist has a website and mobile apps, and they’re gaining traction— last month, user activity doubled over the previous month.

I’ve known Jody, Avelist’s founder and CEO, for over a year, and we talk every other week or so. I enjoy chatting with her because she always does a lot in between conversations—and she can always explain exactly why she’s executing the way she is.

During my last conversation with her, we talked about Avelist’s fundraising, why they went the non-institutional route, and how they’ve done it so far.

Why Avelist Chose Non-Institutional Funding

Once Jody determined that traditional investors in the Triangle probably weren’t an option for Avelist yet, given that it is a pre-revenue Internet consumer company, Jody saw two viable possibilities:

1) Travel the country meeting with investors.
2) Seek non-institutional sources.

She chose the latter.

She explained, “I was initially working a day job at SAS, so I couldn’t travel around the world meeting with investors. It made more sense for me to meet with people locally. This also allowed me to remain focused on building the product and being a part of the day-to-day team activity while fundraising.”

Seed Funding So Far

To-date, Avelist has raised $225,000 and is seeking an additional $100,000. Jody set a minimum investment of $10,000 and started with friends and family. Then she asked friends and family to talk to their friends.

While many shy away from friends and family funding because it can complicate personal relationships, personal history can be an asset. It gives you instant credibility with potential investors.

Theresa Hart, an Avelist investor who has known Jody for years, said, “My personal knowledge of Jody is the first thing I thought about when I heard she had been seriously working on a startup business. I was interested in knowing more because I know her to be a bright person of integrity, with a strong work ethic.”

In addition to many one-on-one meetings, Avelist hosted an event for potential investors in April. It was at the home of a friend who had already signed on, and attendees, which Jody kept primarily to friends of friends, had the opportunity to meet Avelist’s team, advisors, and supporters. It was a house full of Avelist information and enthusiasm and the company raised $80,000 in one night.

Pros and Cons of Friends and Family Fundraising

For Avelist, a non-institutional seed round allowed Jody to raise locally, quickly, and on an as-needed basis using a convertible note. Jody also pointed out that she knows the reputations of Avelist’s investors.

As for the risk to personal relationships, addressing this takes extra work and Jody has put significant effort into separating the personal from the professional.

“I was careful to emphasize that investing at an early stage is a high risk investment,” she said. “And if there was ever a time when I was concerned that a relationship would be ruined by that person investing, I simply avoided asking him or her to be involved.”

She added, “I wouldn’t ask anyone to invest in something I didn’t believe in.”