Holding the fund is not like typical investing, as hedge funds are meant to be long-term holds, with limited exit periods (quarterly) and distributions (no more than a percentage of the overall) from the fund.

Most the explosive growth in startups happen before they IPO, but traditional investors have been shut out from it until recently, due to the SEC believing it gives average investors too big of a noose to hang themselves with.

Like any investment (or anything in life) you should only commit what you're comfortable seeing disappear, but bigger risk exposure means the potential for bigger gain. Imagine the folks starting up all these ventures, if they fail they're left with nothing, in many cases.

As for their hiring: I think they really want only the cream of the crop. The top performers that can make maximum impact on their product.