You've probably got to be quite bright academically to get in but if you look at how their compensation works they mostly get a cushy job with a high salary paid for by a 2%/year or so charge on funds invested. Performance fees on exit are years away. So if they can say to investors "we're in all the hot starups like color.com" it works if the investors throw in billions even if the startups are disasters. So they may be dunces at understanding startups but are probably quite good at their core business of fund raising.