These third-rate VCs aren't just competing with Sequoia and KP for these investments, they are competing with buyout offers which would make the founders semi-rich. This is very appealing alternative to selling out early when you are a year out of grad school, have never owned a new car, and the $500 plane ticket back to the east coast is keeping you from seeing your ailing great aunt Betty (okay I went a little far with the last point)