"investors tend to be less willing to invest in bad times. They shouldn't be. "
Angels probably should. Many of them just had a 20%+ decrease in their net wealth. Investing is an activity for them, like golf, not a profession. They shouldn't make themselves feel uncomfortable financially.
There's a difference between which action has the highest EV and which one you should take.
Of course, but they've already achieved independent wealth, why risk it? Extra money to them is just icing on the cake at this point. Investing is basically a hobby for them, and when their money starts to evaporate, it's the first thing they will (and should) cut out.
Do angels really risk money that they can't afford to lose? I'd think that most of them would sock away enough to remain financially independent in safe investments, and then do their investing with "play money".
They probably don't risk money they can't afford to lose. But if you figure an angel invests 20% of his money in startups, and the stock market comes along and reduces his total net worth by 20%, how much is he going to invest now? How much if he invests 10% in startups and the stock market hits him for 30%?
It may not be 0, because he may have had other expenses and investments that he prioritizes angel investing over, but it probably won't still be 20%. The total dollar amount he'll be willing to stick into high-risk investments will probably decrease.
I'm talking on average, of course. Each individual will vary according to their net worth, lifestyle, investment philosophy, etc.
Angels probably should. Many of them just had a 20%+ decrease in their net wealth. Investing is an activity for them, like golf, not a profession. They shouldn't make themselves feel uncomfortable financially.
There's a difference between which action has the highest EV and which one you should take.