As a pre-seed/seed stage startup investor, the most frequent gripe I hear from Indian founders is that they had a better product, competent team & better numbers, yet the investors funded their competitors. This makes them confused & dejected, and they lose faith in VCs & angels. A fair number of founders have remarked to me that “VCs are dumb”.
My honest answer to this is that the competition is simply selling a “better story”. But the founders are never satisfied with this response. And I believe the problem stems from a belief in pure meritocracy.