I wish I could find it - there is a blog post out there about someone meeting with a VC. The VC and the person get to talking - and the convo goes to uBeam.
The VC says something to the effect of, "Yeah, I know the physics don't make sense. But the CEO is so charismatic that more investors will want in down the line."
"Pied Piper's product is its stock. Whatever makes the value of the stock goes up is what we are going to make. Maybe sometime in the future, we can change the world and perform miracles and all of that stuff. I hope we do. But like I told you before, I am not going to mortgage the present for that."
I remember the first time I saw a group of young VCs (in Palo Alto no less) in public. Walking down the street together. They looked like male supermodels. All of them perfectly dressed, tall, good looking, triathlon physiques...
As soon as I saw this, I could sense that this business is driven by "Confirmation Bias" and "Representativeness Bias", the Halo Effect.
These guys are hiring people who look like themselves, who do the same (extreme) sports like themselves, etc. It's a case of Steve Jobs looking for someone who looks like Steve Jobs, instead of the plump, dowdy, disheveled, and genius Steve Wozniak.
Looking at it from another direction, maybe it's because that's why they're good at dealing with founders and LPs? The point is, everyone has biases, and probably one bias results in another. You can't just say "They hire people who look like them" without thinking about why that happens.
This is what happens when companies are expected to sustain themselves on ever-increasing investment money until an IPO, instead of actually making money themselves. It's a Keynesian beauty contest gone wrong.
It's what happens when people are too removed from market forces. The VC is not attempting to invest in a business that will make lots of money. They're investing in a business which they can _sell_ for lots of money.
The market doesn't get a look in until the last greater fool buys it and is holding it when the music stops. Everyone else has been handsomely rewarded for their tomfoolery so when the music starts playing again they'll dance.
I should note that they deleted their account over a controversy over false claims they made about their credentials (massive oversimplification), so take the posts with a grain of salt.
The VC says something to the effect of, "Yeah, I know the physics don't make sense. But the CEO is so charismatic that more investors will want in down the line."