Ndubuisi Egwim caps startup investments at 5-10% of his portfolio because a total loss would hurt but not break him. After 20 years picking individual companies, he uses index funds for long-term goals and left his salaried job three years ago once his investing skills were solid.
I never put more than 5 to 10% of my investable assets in a startup. Why? If the startup goes to zero, our startups could happen. It would be a bit painful, but that will not be the end for someone like me. I invest in individual companies. If I was investing for, let's say for my little one from day one we're looking at the index fund because basically I started investing 20 years ago but now I'm thinking, yeah, if I mess up, now I'm approaching 40. If I mess up, the cost is a bit high. The cost of the mistake is high. But let's say when I was starting out I didn't even know so much about index fund like 20 years ago. So basically I just started with individual stocks and I got really, really quite good at analyzing companies, especially now that I got to that point. I was able to leave my salary job three years ago.
