That's true, but it does increase the 'batting average', the number of 'successful' exits.
Personally I think VCs should only rate themselves by the number of companies they found that are big successes, not just the number that didn't tank.
But batting averages are used with some regularity to compare score.
> I'm pretty sure there's a better-established rating system for VC's that doesn't take any of this silliness into account.
Total return on total investments?
For founders batting average is possibly more important than for the VCs themselves.
After all, a single spectacular ROI would make a VC that lost all but one investment look pretty good on paper.