When investing, first-time investors don't choose between all startups that exist in the entire world, or even just their city. They choose between those startu

When investing, first-time investors don't choose between all startups that exist in the entire world, or even just their city. They choose between those startups they have access too, which is a much much smaller number. So what the best VCs have done is build a good network, rather than used extreme intellects or investment models to make their decisions. Also, as firms grow, they lose touch to the scene, and that is probably why its hard to make good repeat investments. The next Facebook isn't necessarily in your network.