Yes! Except I would phrase it differently: Never loan money to a friend or family member - either give money or don't. Oftentimes, the person you gave money to will later give you as much or more than you gave them, but that isn't a loan repayment, it's just them being kind to you in the same way you were kind to them.

To hnriot, who I can't respond to: No, it's not being a chump to willingly give money to those you are close to. The other side of the "be willing to give money to friends" coin is "be aware and careful of who you consider friends". You may be a chump if you give money to people actively taking advantage of your willingness to do so, but those people aren't friends. You should never give money to people who aren't your friends, and you probably shouldn't loan it to them either, unless you're in the lending business.

If you lend $20 to a friend and never hear from him again...it was worth it!

There's a special name for money you loan to friends and family. Gift.

When I was in business school, I took a class on venture capital from one of the earliest VCs in the valley. (He invested in Intel, for example.)

One of the two founders of Genentech was a good friend of his, and so he had the opportunity to put the first money into what became Genentech. But he refused to do it because they were good friends, and instead helped him find other investors.

Somehow I don't necessarily see something like this happening often in today's funding environment.

eh? but OP didn't LOAN him money.He just used a fundraising platform developed and run by a friend of his. So since everyone donated the money to platform (like kickstarter) and the platform didn't transfer it to OP, the platform became indebted to him.

that's not very good advice. that's called being a chump.