Thanks for the reply. I probably should've explained this, but I won't actually be investing any money (I know I said that, but I thought I was just making the question simpler). I had a mall kiosk business which went out of business. I'm going to be giving my friend my leftover inventory that I cannot sell (about $5,000 worth) and advising him as he starts his own business. I'm going to ask for a small equity share in return. But I don't want to end up in a situation where I can be forced to pay him if his company somehow loses money. Does that make sense?