If a startup is extremely successful but takes a long time to exit, do VCs still consider it a failure?
No. While you won’t be the favorite son at the VC firm during your long journey — it doesn’t really matter. A great exit later is still important, and economically impactful, and maybe almost as good as a great exit early.
As a VC, you are always going to have multiple irons in the fire. They will mature (and in some cases, fail) at different rates. And as long as the cash-on-cash return is significant (say > 5x), the return on their investment in you will be just fine.
VCs are really graded more on multiples of cash returned than exactly how long it takes (I know this is odd, and only partly makes sense), though of course both matter.
However, funds don’t last forever. After about 10 years, the money will get tired. VCs want to wrap funds up after 10-12 years, if they can.
Accel invested in the company now known as “Slack” 6 years ago. Years before it was even Slack, years before it had any traction at all, years before it had a nickel of revenue or any significant metric other than cash losses.
They are still pretty happy today, I’d imagine: