Why Jay-Z and a Financial Planner Say You Shouldn’t Give Money to a Family Member Who Wants to Start a Business
Getting help from mom and dad to fund your startup is so common the industry has invented a polite term for the practice — a friends and family round. Some of the world’s most iconic startups-turned-tech-behemoths, including Amazon and Facebook, are reported to originally have gotten off the ground with family money. And it’s also something of an open secret in startupland that coming from generational wealth greatly increases your chances of success.
But not everyone is a fan of the practice of handing out cash to relatives. A resurfaced clip of Jay-Z saying he wouldn’t give a cousin $4,800 to start a business recently made waves on the internet. The billionaire music mogul explained: “It don’t work like that, man. You gotta explain to him life isn’t like that. Money isn’t free, and no one’s giving out opportunities.”
“You going home for solace, you want family, you’re going home for peace of mind,” he added. Being hassled for a loan apparently gets in the way of the homey vibes.
Some fans gave him stick for being stingy, but at least one financial planner is backing him up. Writing in the Financial Times recently, wealth planner Neil Torney made a forceful case against the bank of mom and dad investing in…
