[tzakrajs]

I'm going to go out on a limb as guess that the Harvard professors used their Business school's reputation to prop up the reputation [edit: was valuation] of the firm. We see this in many research focused universities where professors use the clout of their program to pump up their student's ventures -- typically with the professors being angel or early seed investors.

Corruption doesn't need to be illegal or against policy to be corruption. Corruption can be the degradation of institutions -- making their results less reliable -- and muddying truth.

[tlb]

VC firms don't have valuations. They raise funds and get paid a percentage of the funds under management (typically 2%/yr) for operating costs and a percentage of the overall gains they make (typically 20%).

As far as reliability of results: an insider's view (perhaps slightly biased) is usually more reliable than an outsider's view (who doesn't know anything more than what's publicly reported.)

[tzakrajs]

Thanks for making this clear, I edited my statement to be reputation based and not valuation since the judgement of the firm is important for their ability raise funds.