Yes, there are some limits on Section 1244 losses. The $50k / $100k is one. Another is that it only applies to the first $1M that went into a company.
This is almost always true of “family and friends” money; it’s often true of the angel rounds; it’s generally not true of later stage, venture capital rounds. Angels > Venture Capital here.
It can be complicated on angel rounds too. How do you figure out who can take this benefit if, say, the $500k angel round represents the $750,000-$1,250,000 dollars into a company? Good record keeping, thorough understanding of the company’s cap table, being the lead investor and first funders in a round – all helps to make sure you get the benefit in these situations.