20 Mar 2025 3 min read

The Art of "Building" a VC Track Record: How to Be Economical With the Truth

Venture capital, like any industry where past success is difficult to verify, has a long tradition of being economical with the truth.

For those unfamiliar with the phrase, “being economical with the truth” originates from British political double-speak—often meaning to leave out inconvenient details while still technically telling the truth. And in the world of VC, few things are more creatively presented than track records.

Go on LinkedIn, and you’ll see countless VC firms and angel investors bragging:

“Our portfolio companies have raised over $10 billion!”
“We backed [Company X] before their $50 billion exit!”
“We have invested in multiple unicorns.”

Sounds impressive, right? Until you realize that:

That $10 billion was mostly raised years after they exited and had nothing to do with them.
Their “investment” in a unicorn was actually a $50k SAFE in a pre-seed round that had zero influence on the company’s success.
The $50 billion exit happened a decade later, after several new investors, a complete change in leadership, and possibly an entirely different business model.

This is the VC equivalent of saying: "I helped build Tesla" because you once interned at a battery supplier in 2006.

The Trick: Riding on Future Success Without Being There

A classic move is for a VC firm to claim credit for a massive funding round or an exit that happened long after they cashed out.

Let’s say:

A VC firm invested $1 million in a biotech startup in 2015.
They exited in 2018 when the company raised a modest $50 million Series B.
In 2023, the company IPOs at a $5 billion valuation.

Now, the original VC firm can subtly frame the story as:

“Our portfolio companies have created over $5 billion in enterprise value.”

Technically true. But did they play a role in that $5 billion outcome? Not at all.

Exceptions: When Track Record Actually Means Something

There are, of course, real track records in venture capital. Some investors actually pick winners early and stay involved in their success. A few signs of genuine VC skill:

Consistently backing companies that go on to raise follow-on rounds from top-tier funds.
Holding investments long-term and guiding them through growth, not just flipping for a quick multiple.
Being recognized by founders as actually useful—not just a name on the cap table.

These are the Sequoias and Andreessen Horowitzes of the world—firms that can genuinely claim to have spotted, nurtured, and grown unicorns.

How to Spot the Smoke and Mirrors

Before being impressed by a VC firm’s billions raised claim, do some quick sanity checks:

Did they actually invest a meaningful amount?
- If they put in $25k at pre-seed and never followed up, they were a spectator, not a driver.
Did they exit before the big money came in?
- If they sold their stake before the unicorn valuation, they didn’t create that value—later investors did.
Are they claiming credit for “having been involved” with big names?
- If their LinkedIn says they “worked with” a startup that later raised $500 million, that could mean anything—even just taking a meeting once.
Do they have any real founder endorsements?
- The best investors don’t need to brag about being involved. Their founders do it for them.

Would This Logic Work Anywhere Else?

Let’s apply this thinking to other fields and see how absurd it is:

A personal trainer worked with a guy in 2010. Ten years later, that guy wins an Olympic gold medal. Can the trainer say he built Olympic athletes?
An accountant did a tax return for a startup in 2015. In 2024, the startup gets acquired for $20 billion. Did they help “build a $20 billion company”?

Of course not. Yet, in VC, this kind of claim is not just common—it’s standard practice.

Final Thought: Always Check the Fine Print

Before believing a VC’s LinkedIn flex, ask:

Did they actually invest a significant amount?
Were they involved long-term, or did they cash out early?
Are they claiming credit for things that happened years after they left?

Because saying “I helped companies raise $20 billion” because you advised a pharma company once in 2015 that later got acquired? That’s not a track record. That’s creative storytelling.

And in VC, storytelling is often more valuable than the truth.