Does a sponsor's own money in the deal actually tell you anything, or is it theater

Signals that are cheap to fake deserve suspicion, and a GP co-investing alongside investors is starting to look like one. Consider two decks that both lead with it. One sponsor puts in 5% of the equity, the other says 10%, and neither says where the money came from. The case that it matters: money in the deal means the sponsor loses real cash if the plan fails, and the promote isn't the only thing at stake. It's the simplest alignment there is and it costs them something to show. The case that it's theater: the co-invest can be borrowed, it can come from fees earned at close on the same deal, and the sponsor can have twenty other deals running so this one's $250k is a rounding error to them. Meanwhile it can be most of an investor's liquid net worth. A number that's 2% of the sponsor's world and 60% of the investor's isn't alignment, it's arithmetic that only looks symmetric. There's a third view worth weighing: what actually matters is who signs the loan guaranty, since that's unlimited exposure rather than a capped check, and the co-invest can be a distraction from asking that question. There isn't a single settled answer here. Curious where the room lands.