Somewhat related, the bull run of the last decade has made it possible to run a fund and only have a 10% hit rate (absolute winners), compared to a 52% hit rate for hedge funds in the public markets. The net effect in VC must have been a sense of a "can't lose" attitude. Added to the fact that there is a herd mentality when a firm that is hot is raising money, the due diligence boils down to "other big VCs are investing and we don't want to miss out". In other words Group Think, but it doesn't matter provided the public markets are sending newly minted IPO stocks to the moon. Perhaps more turbulent public markets will enforce more stringent due diligence...