Also, a great bunch of comments can be had by looking up speech's given by Warren Buffet's older partner charlie Munger. He talks at great length about behavioral influences and how you can often predict a result just by looking at the incentives for the participants involved.

Investing is full of examples of social proof. I think you have to make a real distinction between social proof and true expertise.

I know more about broadcasting than 99.99% of the U.S. population given my history – and understood the value that Chad and Ryan Steelberg were trying to create with dMarc Broadcasting – yet in the VC world, my involvement carried no social proof. It was still very very difficult to raise money for that company. No one jumped into Pandora when I lead a round there 4 or so years ago – but add Greylock (and of course massive success by the company) and all of a sudden it is Hot hot hot!

I may have expertise, but David Sze has social currency – and today – social currency is worth far more in terms of financing.