A founder explains why he caps individual investments at $100k. He lost $175-200k in private equity deals that promised 20% returns but turned out to be a Ponzi scheme and a frozen fund. Smaller $25-50k real estate bets performed better.
I never put more than $100,000 into any deal, period. And I'm like, sounds like an accounting nightmare to me. But he had a lot of logic with that. And those deals I'm referring to, by the way, they actually weren't real estate deals. They were private equity deals that were supposed to cash flow like 20% a year. And turns out one was a Ponzi scheme and the other stopped distributions. So they were some of my worst performing deals. So where I had put maybe $175K, $200K into stuff like that and then $25K or $50K into a real estate deal, it really skewed the balance of my portfolio.
