Investing in Private Companies

This article is about investing in private companies, rather than publicly traded companies. The focus is on smaller, less visible entities – such as when a friend launches his own business and asks his friends for investment, as opposed to being an early-stage investor in some big start-up backed by venture funding. I’d like to explore the risks of this type of investing. 1. What questions one should ask before making this investment? 2. What expectations should you have? 3. How do you protect your investment? etc. I’d like to speak with financial professionals who have some experience in this area.