This is pretty common in startups: it's considered bad form to poach employees from companies that have common investors, and board members of those companies.
Sometimes, however, recruiters may not necessarily know and reach out to candidates and violate this unwritten rule.
Also depending on the case, boardmembers/investors may look the other way.
Good question. Think of it as a "gentlepersons" agreement not to actively poach someone from another startup with common investors. Similar to how investors generally don't invest in competitors to their portfolio companies (but it does happen-- See KPCB investing in both INRIX and Waze).
It was more of a guideline, rather than a hard fast rule.
This agreement didn't prevent people from recruiting friends, or from people actively looking to join another company.
Also, if the person is/was unhappy at one startup, the investors would prefer they join another portfolio company rather than not.
