Comment by CharlieDigital

I have brought this up in another comment, but my experience in the VC world is that it operates too heavily based on 4 types of "trust":

    1) Institutional trust (Stanford, Harvard, MIT, "ex-FAANG", "ex-McKinsey", etc.), 
    2) Social trust (someone you know that has already established one of the three other kinds of trust), 
    3) Serial trust ("3-exits", "former CEO/CTO/VP of..."), and 
    4) Transitive trust ("Sequoia invested in X; I trust Sequoia; therefore, I should invest in X")

In many cases, this trust makes perfect sense. But it seems that in more than a handful of high profile cases, these types of investments based on trust has superseded basic due diligence, skepticism, and common sense.