In David S. Rose's book, Angel Investing, why does he suggest investing in 20 to 25 companies?

Because on average, a small percentage of investments will turn out to be very big successes and result in enough profit to cover the losses of all the others. The goal, therefore, is to invest in enough companies to give you decent odds that at least one of them will be a big hit.

Let's say that one out of ten companies in a professionally selected angel portfolio is statistically likely to be a hit. If you invest in only one company, the odds are therefore 9:1 against your having a hit...but if you invest in twenty companies, the odds are 2:1  in favor of your hitting a home run.

Does that make it any clearer?

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