It IS a bad deal. If they only pay 4%, when the market risk demands 25% that should make it an automatic no go. If this is preferred stock as it appears, but the venture goes south, you invariably will lose all your money anyway. But it is successful then you underwrite the profits for the common shareholders with your super cheap loan.

Is there any value to this offer? We were offered 4 percent B stock in a medical marijuana dispensary in IL, provided they get licensing. They will also try for multiple dispensaries & a grow. This is with 25 percent risk on 100,000. At first I thought it was a bad deal but now I'm unsure...