Like other happily delusional folks, I have my lottery fantasies. Were I to win the big jackpot (say, the Mega Millions drawing for $667 million tonight), I’d probably put he bulk of what I get to keep in index funds and have a ball off the earnings. I wouldn’t invest a lot in individual businesses or schemes to make big bucks - 5 or 6% annualized is fine by me. If a family member or close friend wanted a relatively modest amount of money to start a business - say $200K - I’d be more likely to just give it to them instead of loaning it.
Given that premise: say I gave my brother (who works in financial services and does reasonably well, but isn’t rich by any definition) funding to start his own firm. Now say that firm makes a few mistakes in judgment and winds up breaking a few laws. Am I on the hook for anything connected to that enterprise because I fronted the money - with no knowledge of any wrongdoing or expectation of return? I would think I would be free and clear, but there are things in Heaven and Earth not dreamt of in my philosophy.