The only way for you to answer the question is if i tell a story but it pretty much comes down to: Does a verbal contract hold up in court?

Most contracts do not have to be in writing to be valid and enforceable, but of course a court is much more likely to believe that there was a contract if there is documentation.  From what you write, however, I think you would probably have been better off if there had been no investment contract.  If you had loaned your friend money, you would be entitled to have it repaid, although the two of you could argue about when it was supposed to be repaid, whether it was supposed to be repaid in one sum or installments, what interest rate applied, etc.  An investment in a business, however, only entitles you to an interest in the business; if the business makes no profit, you lose your money.  However, you may have a claim against your former friend if you believe he misused the money, for example. if the two of you had agreed that he would use your money for business expenses (space, supplies, advertising, etc.), and instead he had wasted the money on personal expenses.