Gifted funds can be used, but the lawful source requirement then applies to the donor's money as well as to the transfer itself. The investor must still place qualifying capital at risk in the enterprise and account for ten qualifying full-time jobs. A gift changes the evidence needed, not the underlying tests.
Check the donor's willingness before you plan around it
Have a direct conversation about what will be asked of the relative: financial records, possibly over several years, and a signed statement about the transfer. Some donors are content to give money but unwilling to open their accounts, and it is better to learn that before a project is chosen. If the relative's own funds cannot be documented, consider whether the investor has an alternative source that can be.
Add one further conversation with the relative before any project is chosen: what happens if the review takes longer than expected or asks for more than anticipated. Documenting a lawful source and the path the money travelled is rarely a single request, and a donor who agreed to one bundle of statements may be less willing at the fourth follow-up, particularly where the questions reach into a business or a period they consider private. Establish now whether the relative is prepared for that, and what the investor does if the answer changes mid-process.
Hypothetical example: a relative offers to fund a mixed-use development subscription and agrees readily to provide bank records, then finds that the questions extend to a company sold years earlier, which is exactly the conversation worth having before a subscription window is entered rather than after.