Because you're not legally able to do so unless you're an accredited investor?

If you have the $250k/yr at BigCo then you are accredited, so there you go :).

You can do friends and family financing without being an accredited investor. You just need an existing relationship before the investment.

However, 200k for the last 2 years + an expectation for 200k next year qualifies you as an accredited investor. (300k if married) https://en.wikipedia.org/wiki/Accredited_investor

Is this true? if so, how can sites like angel.co exist? I believe I can invest in most of the startups right now on there..

You must be an accredited investor to invest on angel.co. see: https://angel.co/help/general-solicitation/accredited

From the AngelList FAQ: "Investors are required to fill out a questionnaire to establish that they are accredited. You can only accept money from accredited investors whether you raise money publicly or not."

Hmmmm... I'm guessing this law exists to prohibit speculation by people who would use their children's tuition for it?

I remember reading something about the Great Depression and it involved ordinary people investing in stocks and losing everything.

Not their children's tuition, their next month's rent or grocery bill.

Because more people have time to invest than have money. And because investing time in a fast-growing startup is a hell of a lot more fun.

Because I enjoy the work and I like being part of the action. I invest my money too, but it doesn't meet the same need.

Because it is very difficult as an unknown individual to invest in any "real" startup vs the latest Uber/AirBnB clone on AngelList.

Time is money.