Maybe directly relating startup failures with an IIT/IIM pedigree is a bit of a stretch but the fact remains that VC’s are showing extraordinary laziness in placing too much of a premium on the tag itself. Does an IIT founder increase the chances of success for a startup? Perhaps. But what exactly are the reasons behind that success? Innate genius of the founders, willingness to work harder than anyone else, or the ease with which many doors might open for them just because they are from IIT?
Like most situations where someone is spoilt for choice (recruiting managers, JEE/CAT evaluators), IMO even in investing the default is to rely on the most easily identifiable metric in the first filtering stage. Plus, it is easy to justify to your bosses/HNI investors that you at least backed the right horse — most businesses will fail, but you can just chalk it all up to external factors and not on the failure of the founder who had all the right credentials.