[mammalfriend]

I suspect that the investors thought the worst case scenario was an aqui-hire of a highly-credentialed team, at a value close to the cash invested. And likely with enough preferences to return the entire acquisition to the investors.

While this was an erroneous assumption, I can see how this may have contributed to a perception of lower risk to the investors.

What they seemed to ignore was that stuffing a very early consumer startup with a ton of cash and a lot of hype to live up to might have contributed to the failure. Instead of giving them resources to figure out the space, investors contributed rope with which the company could hang itself.