[tolmasky]

As long as the money is private, they should be able to do whatever they want. If they're actually bad decisions (a worse startup getting money solely due to being inside), then they'll suffer for it. If the decision however gives a return, then what's the problem?

I don't feel suspicious of family's investing in their kid's venture -- wow how unfair! so biased, they should have given the kid next door a fair listening to as well!

The problem only arrises if bad decisions are then publicly de-risked (as is the case in banks, etc -- don't know specifically if this happens in an indirect way with VC's). But in and of itself -- "people you know" is one of many possibly good or bad metrics you can use to invest your own money (or the money interested to you by funders that know how you operate).

[RodericDay]

> I don't feel suspicious of family's investing in their kid's venture -- wow how unfair! so biased, they should have given the kid next door a fair listening to as well!

someone a while back made the case that SV is an offset economy where instead of CEOs you have VCs, and instead of Managers you have Startup CEOs.

Keeping the vague analogy in mind, how is flooding your kids with easy credit not available to other people not a form of nepotism?

[mc32]

It is, but what's the problem? It's like you taking your money, assuming you earned it, and buying things for _your_ friends or _your_ family. So long as your husband/wife/partner is okay, why should that be a problem?

Should I think it's unfair you spend nothing on me?

[mblevin]

It certainly is a form of nepotism, but since when do we regulate nepotism?

[shubb]

Depending on the fund it does. This diagram explains it: http://www.agilevc.com/wp-content/uploads/2014/10/Startup-Ca...