Someone told me, this is how VCs usually operate:

10 investments

6 die

3 are doing ok, but not steller

1 is going to be a unicorn, returning the fund

So, yes, VCs have been running around with "rotten apples" for ever. They just need 1 of the startups to succeed. And, due to the complex reasons of start-up failure and success (people, timing, execution, etc.) they can't really know before hand, which of the 10 is going to work.

So they place 10 bets and wait and see. The other 9? F-them...