Caution theoretical production structure. (never been play tested;)
First take your design ideas and put them in front of your peers, mentors and any members of the demographic you can reach for feedback. Work with other designers to zero-in on the game you should/will design and make. Build a budget for that game and coordinate with the team you currently have to understand what you can achieve. Not what you want to achieve but literally estimate projected hours of production and try and nail down a release date (this day should matter and will effect the game's success no matter what the game's quality and marketing). Now break your design into priority milestones. Then the real work starts.
Before you agree to any money, build a demo (either video or playable, depending on whats important and achievable) and finish the design bible (the document everyone on the team can use to stay on track). Using your budget, projected milestones and release date, pitch the game and agree to the offered sum. Always do the paperwork (especially with family). Here's where things get tricky.
Begin milestone development as well as a crowd source funding campaign using a small portion of the investment (preferably an amount you can pay back if this whole thing falls apart). Once you have your hands on the money of your crowd sourced backers, leave the rest of the investment money banked. The crowd funding success will help determine scope and popularity and with any luck should exceed the investment amount. This is where you can start ramping up development as well, bringing in more talent and push production forward (be sure you restructure the budget and either change the release date at this point or push to really nail it).
The only other part of the budget the investment money should cover (now that you are in development) is the marketing (website and kickback incentives) that way the crowd funds are all focused on development and the investor can get a little more involved at this point. This is good idea since they will most likely have good contacts that can help widen the scope of the marketing. Launch beta and focus on distributing on the projected release date. Launch the game. Payback whatever you can and decide if you're going to take a stab at a second game. If your budget, design, milestones and projected release date all worked out you should be able to payback and give a kickback to your investment partner as well as offer gamers a great game with updates and support. No matter what the size or type of game you make.
Let me know if this actually works ;)
If it was unlimited fun-ding (/not family money), I'd be building my dream game Peaces. A paired down marriage of tactical shooter combat mechanics with/against commerce focused RTS on a small spherical map. This free-for-all explores a few different unification win conditions including a non combat alternative and wraps up with a survival mode. It'll demand that the best player's prove their worth in both a combat and a command role and give newbs plenty of targets and objectives to follow. I designed it to make survival more important then domination for everyone playing. If you dig any of these ideas or could use an animator MSG me.
Last point @samoth You didn't answer the question. You just told him not to be stupid with the money.
Good luck Supes, on both school and the upcoming project!