This Knowledge at Wharton article is support the argument of "smart money" that became one of the buzz words of the bust.

"If a company borrows from a bank and the terms are similar, it does not matter what bank it gets the money from. In seeking venture capital investment, however, a company is hungry not just for cash but also for the venture firm's "reputation and access to a network of relationships -- with customers, suppliers, investments bankers and other important constituents in the universe that the entrepreneur cares about," Hsu says."

"This may not be a startling insight to technology entrepreneurs who are familiar with venture capitalists. What Hsu's paper does, however, is provide "a scientific measurement" of the magnitude of this phenomenon. He found that offers from more reputable venture capitalists are three times more likely to be accepted by entrepreneurial companies and that, on average, these favored investors acquire start-up equity in the companies at a 10-14% discount."

Personally I do not believe much in smart money. Undisputedly there can be great benefits finding a smart partner who would also have the will to invest in your company. But this doesn't happen to come together so often. The network of most VC is often blatantly overestimated. It can deliver positive network effects, but it's hardly (there are exceptions like Kleiner& Perkins, Sequoia of course) worth the discount you accept.