I worked for my dad's contracting company for six years, straight out of college. Six months ago my dad's company sadly went under. Since this is my only work experience I listed it on my resume. Under references I listed my supervisors and my dad by name with the title "Owner/CEO."
After two interviews I still did not disclose that the business was a family business. I should also mention I'm married and don't share my dad's last name.
Today my dad called to say he had a message from the company seeking a reference about me. He asked if there was anything he should know first. I said, "Yes, I'm not your daughter." He seemed a little awkward about it so I said "I understand if you don't want to say that, then just don't return their call." He said, "No problem," and called them back. Twenty minutes later he called me back and said he told them I was his daughter. What do you think? Have I lost this opportunity?
You'll have to wait and see how this job opportunity turns out. If the issue comes up with the employer, be honest that you weren't sure how he would feel about you listing your dad as a reference, and that you're now glad you did because you're proud of having worked for him.
For job searches in the future, talk with your dad about how to handle listing him as a reference so that you do it in such a way that you and he can be honest and comfortable about it. There's nothing to hide about working for a family business as it's a great experience and a wonderful way to gain insight into the business world.
Best of luck with this and future job searches!