Therefore, it is at risk and if the startup fails, the money is lost. Qualified/Accredited investors (non friends, family, fools) are required to have such high net worths/income to prove that they can accept these losses.
Even if it were debt, if it was not personally secured, (and there weren't any shady and extremely wasteful actions by the management), the company / startup has $0 in assets when it fails, and therefore can not pay its obligations.
Add'l info : Accredited Investors by the SEC must have 200k annual income and 1mln+ 'liquid' assets
The outside case for this is if you use your personal credit to secure an office building, car, or other loans (bank)
Your seed stage needs to provide the founders enough income/resources that they can and want to do this full time - along with have some ability to hire out additional jobs over enough time (3+ months) to get an A round or have strong revenue producing customers. In the case that you need to hire an additional developer for 3 months, you'd be out of your $20k seed money.
And yeah, 15% is high but they say it can be "washed" during next round of funding Appeciate your information!