This is a good way to get started with help from friends and family. Almost everyone already does this in some ways, it's good to have a formal process to protect both parties' interest and the relationships.
Friends and family funding is indeed very common in startups and small businesses. Over 40% of businesses started from borrowing money from friends and family. The rules are very simple: 1) make sure they can afford to lose the money; 2) have a formal agreement and make it professional, set the right expectation, and communicate the risks upfront; 3) keep them informed on your business status, give them regular updates regardless whether it's a good or bad news. Even though this sounds easy, the actual fundraising process can be very tedious. You can get a lawyer to help you but that will cost you a lot of money. The best way is get use the tools online, like http://kickstarter.com, or this one http://trustleaf.com which is specialized in friends and family funding.