Nobody involved in venture capital has incentive to tell the truth.
In a clear majority of cases, a startup closing its doors after two years is not considered a failure by the VC fund. The startup successfully spent the money the VC firm was contractually obligated to invest, may have employed the VC's choices of officers for a significant period (providing them income and experience), maybe purchased a great deal of tech from suppliers the VC officers are themselves invested in, and may have left valuable assets that could be snapped up at auction.
The biggest problem a VC firm has is the five billion dollars of others' money they have to "place" in only 30/60/90 days. What happens after placement is much less their problem. They know most of their placements will be duds, but they and the actual investors knew that up front. Once the money is "placed", though, much of it can be siphoned off for the benefit of the VCs' cronies or one or other non-dud. Maybe, after collapse, a non-dud or non-startup can buy up assets of a dud for pennies on the dollar, and extract something usable, like patents or equipment. Sure, the investor lost that money, but somebody got it, and somebody ended up with what the money bought. Just not, often, the founders.
None of this is good for most people who do a startup, unless they happen to be chosen as a non-dud. The chosen duds are valuable for money laundering, which few startup principals really meant to sign up to be. Although some did.
In a clear majority of cases, a startup closing its doors after two years is not considered a failure by the VC fund. The startup successfully spent the money the VC firm was contractually obligated to invest, may have employed the VC's choices of officers for a significant period (providing them income and experience), maybe purchased a great deal of tech from suppliers the VC officers are themselves invested in, and may have left valuable assets that could be snapped up at auction.
The biggest problem a VC firm has is the five billion dollars of others' money they have to "place" in only 30/60/90 days. What happens after placement is much less their problem. They know most of their placements will be duds, but they and the actual investors knew that up front. Once the money is "placed", though, much of it can be siphoned off for the benefit of the VCs' cronies or one or other non-dud. Maybe, after collapse, a non-dud or non-startup can buy up assets of a dud for pennies on the dollar, and extract something usable, like patents or equipment. Sure, the investor lost that money, but somebody got it, and somebody ended up with what the money bought. Just not, often, the founders.
None of this is good for most people who do a startup, unless they happen to be chosen as a non-dud. The chosen duds are valuable for money laundering, which few startup principals really meant to sign up to be. Although some did.