With unemployment still close to double digits and entry-level jobs in short supply, it’s tempting for parents of college graduates—and other struggling twenty-somethings—to try to help their adult children start businesses.

If you have an adult child asking you for investment capital to launch a new business, you may be strongly tempted to comply. It might be a good investment, or it might not. Either way, a recent article in The Wall Street Journal points out several things you can do to preserve both your capital and your relationship. Understand that most start-up businesses fail within the first few years, so there is a good chance that your “investment” will not pay off, or if it does, it may take longer than you expected. Decide now whether you are making a…

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