I've heard that test argument before, and even larger firms like a16z say that. However, for me, that's more a strawman argument that tries to exploit the market inefficiencies. They already have all the connections and the brand, so making it harder for newer investors to get to quality deals is an advantage for them.

What they don't realize is that they are shooting themselves in the foot. They are missing out on new and unknown founders. Is there a reason to assume founder quality is not uniformly distributed? (among founders with and without a network?).

Furthermore, I think the test argument is just untrue. There are a lot of people who are good at networking but suck at building a company and do get investments just because of they happen to know X or Y. I know that the realm's currency is the people, and I know that people are super important (like, if you're building a company, it's all about the people), but networking shouldn't be part of this.

The networking argument just doesn't make sense from an economic perspective.