We mean business
Comprehensive legal services for businesses
in New Jersey and New York

COVID-19 Notice: In order to best serve you, while being mindful of your health and safety, we are available for consultations and conferences via telephone and video. We can arrange for documents to be prepared, reviewed, signed and exchanged electronically. We are ready to assist you with all of your legal needs.

We are open and ready to assist you. Go to our COVID-19 Updates page to see our latest statement on the crisis and a list of recent news and developments during this challenging time.
comprehensive legal services for businesses

Consider Carefully Whether to Invest in Child’s Business Venture

Parents naturally want to help their children succeed, but what if your high hopes for their success lead to financial failure for both parents and children? Late last week, The New York Times published a helpful and informative article for parents who may be considering investing in an adult child’s business venture.

The article came about because Nathan Deal, a Republican running for governor of Georgia, almost faced financial ruin after investing in his daughter and son-in-law’s business that later failed. The author of the Times piece, Ron Lieber, concedes that it would be tempting to invest immediately, but parents must first carefully consider the move from three different perspectives and face some “radical honesty.”

Lieber says that parents should consider the investment from three different perspectives in turn: a financial planner, a venture capitalist and a parent. The financial planner would advise you not to invest more than you can afford to lose.

A parent also needs to look at the child’s business plan with the objective perspective of a venture capitalist. The parent needs to compare the benefits and costs of the business in an honest, realistic way.

Finally, parents should look at the child’s business proposal from the perspective of a parent and be honest about why they are considering the investment. If they are just trying to buy their child a job, they should consider if it is because the child cannot find one on their own. If that is the case, the parent may want to consider safer investments, such as a franchise.

If you do decide as a parent to invest, Lieber advises you to consider your investment a gift, and to make sure it is one you can afford to give.


Underwriting a Child’s Business Poses Pitfalls for Parents (The New York Times)

Office Location

Dunn Lambert, LLC
East 80 Route 4 Suite 170
Paramus, NJ 07652

Paramus Law Office Map

Dunn Lambert, LLC
1745 Broadway, 17th Floor
New York, NY 10019
New York Law Office Map

Phone: 201-957-0874
Fax: 201-291-0140

Phone: 201-291-0700
Fax: 212-519-9804
Best Lawyers | Best Law Firms | U.S.News & world report | 2017

GET ANSWERS from a firm
with a sense of business.


Review US
FindLaw Network