The technicalities aren't nearly as important as making sure you have a very frank conversation with them about the risks. Something scary like: "There's a 40%

The technicalities aren't nearly as important as making sure you have a very frank conversation with them about the risks. Something scary like: "There's a 40% chance you will never see this money again, a 30% chance you will only get your money back, and a 30% chance you'll get something extra back. Even if things go well it will still likely take 5 years before you see your money again. During that time I probably won't be able to give you very informative updates, because even I won't be able to predict how things will play out." You have to genuinely try to scare them off. Say it to them verbally and then write it in an email, so that in the worst case they can be reminded of exactly what you told them. You can prove to them that you didn't mislead them. Consider this resentment insurance for people with bad memories/character. Even then only take money from people who can easily afford to lose it. Taking $20k from someone who has $300k in savings isn't going to hurt them. Taking $20k from someone who has $30k savings is a no-no. Really, unless you have a friend/family member that's rich you probably shouldn't be doing this. Maybe a few thousand dollars, but not tens of thousands. Risking your credit is better than risking your relationships. Tread carefully.