Naval: Angel investors tend to be on the tough side when they get started, especially when investing a lot of their own money.
Generally, you don’t want to invest money that you’re not OK losing. If you have too much at risk in any deal, you’ll engage in bad behavior when things get rough. When the company performs poorly, you’ll behave poorly. Emotionally, you won’t be able to help it, and it’ll damage your reputation.
Your reputation is built by the companies that are doing poorly
Your reputation gets built in those moments. Your returns get built by the companies that are doing well. Your reputation gets built by the companies that are doing poorly.
In the long term, your returns also depend on your access. And your access depends on how you behaved with founders when companies were doing poorly.
As a consequence, you never want to have too much at risk. So don’t put down so much that you care.