It seems the legislators are dealing with the problems of the investments probably being a bad bet by limiting the amount investors can blow to 5% or less of their worth/salary per annum. That way you can get the psychological boost of thinking 'hey I'm a startup investor, I'll be a millionaire soon' combined with life going on much as usual when they lose the 5%. Whether that's a good way to allocate capital I don't know. On the one hand cash will be lost on dumb ventures. Then again the odd big hit may make it worth it, possibly for society as a whole rather than for the investors as such.