This is also the case with government contracting. Just like how VCs ignore most pitches that come in cold through the "front" door, so too does the government ignore most responses to solicitations. 90% of deals go to those who are connected to the original source through personal relationships of "back door" deals. 5% of the deals go to those who know how to persistently work the system. And only 5% go to those who actually have the best product at the best price.
When the worlds of venture capital and government contracting collides, it gets even more murky. There are many deals in that government folks are closing with silicon valley firms where someone within the government then ends up working for that same silicon valley firm. It's such an I scratch your back, you scratch mine world.
I don't doubt that VCs tend to prefer those they know to those they don't for the very same reasons.
There are people whose job is to just write grant proposals. Someone told me they had a guy who was making almost twice as much as the developers, just because they were afraid he would leave. Which means the company decided it was better to get contracts even if it meant 1-2 less people available to fulfill them.
Isn't this pretty much true of any bidding process? The people already know who they want, but go through the mandated bids just to say they did while ultimately picking the group they already intended to use? From my experience that's the SOP for ad/creative agency bids, so I just extrapolate that to the rest of the world ;-)
It's worse when the VCs put their own people specifically in positions of control in the government to funnel deals to their portfolio companies, and then those people in positions of control leave to then work for those portfolio companies that now have dozens or hundreds of millions of dollars in government funds. It's much dirtier than just building relationships with people before the offer goes out.
Or Peter Thiel using his personal relationship with the Trump admin to make his crony Kratsios the US Federal CTO and Undersecretary of Defense with a huge budget, who then pumps Gov money to Thiel investments (Palantir, Scale, and others), and then leaves the government to join one of the Thiel portfolio companies (Scale). What a sham it all is. I can provide links to all the above, but these are easily searchable.
When the worlds of venture capital and government contracting collides, it gets even more murky. There are many deals in that government folks are closing with silicon valley firms where someone within the government then ends up working for that same silicon valley firm. It's such an I scratch your back, you scratch mine world.
I don't doubt that VCs tend to prefer those they know to those they don't for the very same reasons.