If it is secured by a debenture or something other than the participation in the profits, then technically it is not equity. Most financiers of commercial debt will insist on a priority claim against assets and force this shareholder to a secondary or subordinated security position. The rewards are direct participation in the profits of that business as well as any appreciation in the perceived value of the shares. The risks represent the possible reality that the share-value could drop to zero. True equity money is unsecured and directly reflects the faith of the investor in the business, its management and the commitment of its principals to it.
Venture capitalists are usually shareholders, secured by share value and legal agreements.
But venture cautiously, many cherished friendships and family relationships have been destroyed through inadequate protection and provision for personal creditor repayment related to the possibility of a business failure. You may also want to provide some personal security or personal guarantee outside of the business itself. The offer of a deferred repayment scheme of some kind may be welcome. Most often these persons are assuming a high risk with little real basis for the investment as a favour to you. Your concern about protection for their money will go a long way to ensuring their future cooperation and avoiding dissension.