Do you think the behavior of these companies could possibly be explained by doing what they think is in their own selfish best interest instead of somehow using "elitist social circles" to "absolve losses"? And who is absolving the losses anyways? Wouldn't some of the people in the "elitist social circles" be investors in AL but not PH and be upset that these "losses" were being inflicted upon them? Why wouldn't they use their elite social clout to stop it?

Anecdote time: I've personally seen a few startups that were failing attempt to sell themselves to the startup I was somewhat senior in. I interviewed and chatted with founders of the startups that were trying to get acquired. My meetings were not interfered with by the VCs or the angels or anybody else. They are far far too busy to care about every minute detail of what goes on at their portfolio companies. Had we ever gone through with one of the acquisitions (which we never did when I was there), my guess is the board would have tried very hard to convince us not to do it, as an acquisition has a much higher chance of going wrong than going well and can be a huge distraction.

It's only in hindsight that 90's era Google is an "obvious win". It was "just another Search engine with a bunch of Stanford buddies for investors" in the 90's and probably would've been called so on HN.

Its seems to me that convincing a bunch of people to part with their money for your idea and then relentlessly trying to execute on it (as PH's founder seems to have done) is very meritorious.

Some investments are clearly made to friends, but you aren't convincing any investor to NOT invest in their friends who they think are great, personally. Now if only there was a process to democratise this discovery more....

P.S: I was referring to AngelList in the end there.