Investing in a Coffee Cart Startup in SoCal. Need advice or just want honest opinion.
I have a buddy who started his own LLC right before the start of 2026, and was about to get a business loan from Chase for $25k with 9% interest which he'd have to pay off over 10 years so he can buy the coffee cart and equipment to get the business started. I had won pretty big in Vegas at the beginning of April ($13k) and decided to quit Sports Betting while I'm ahead. So at this point in this time, I'm sitting on a lot of money, so I told him why not instead of a loan from the bank, he lets me invest $20k for a permanent 20% ownership in his business, and I'd get 20% profit paid out monthly. He thought on it for a few weeks, and decided to take me up on the offer. We met up with a business lawyer who wrote up a contract and altered the operating agreement of my buddy's LLC to include me as a 20% owner once I give my friend the $20k. Now all I really have to do is sign it, but for some reason I have been feeling a little hesitant. Maybe I am in over my head? My buddy has worked in the food industry for a pizza spot for several years and makes a damn good coffee, but how difficult is it to succeed in the coffee space? We made sure to include some safeguards in the contract (such as if he decides to quit on the business and sell off all the equipment before I make back $10k of the $20k I invested, I get 100% of the money from the sell off of the equipment, and if he quits after ive made between $10k-$19.9k, then the selling of the equipment would be split between the two of us 50-50), but I just feel like I'm jumping into a space i know little about. If his coffee is really good, is it reasonable for me to expect success or how much more goes into this space.