I am not a financial advisor, but generally speaking you should only be putting 5% of your net worth into high risk investments (i.e. angel investing). Some people have done the opposite (95% of net worth) and gotten extremely lucky on going all in (see Jason Calacanis's book Angel for example).

> I don't understand it.

I do. Angel investing is a status symbol in tech circles.

https://twitter.com/sama/status/623685126849822720