[caudicus]

I'd guess it's signal/noise ratio issue. I'd assume the number of "I have a startup but no money" people outnumber the "I have money and am looking to invest in a startup" people. By forcing startups to "pitch" and "schmooze" it acts as an filter to keep everyone but the most serious startups from wasting the time of these investors, even if it does take away time from these fledgling companies.

edit: On top of that, in reply to "low key" - I'm reading that as "low net-worth but still willing to spend" - http://www.paulgraham.com/startupfunding.html under "Friends/Family" - taking money from non-accredited investors is a burden according to this essay, but I don't know details myself.