A VC Firm is just a company like any other company. Generally they are Partnerships rather than LLCs or Full-Out Corporations but they're still just a business

A VC Firm is just a company like any other company. Generally they are Partnerships rather than LLCs or Full-Out Corporations but they're still just a business and their investments (and the money they have to make them) are all assets of the company. So you can be penniless and still be a General Partner at a VC Firm if the other partners choose to vote you in. In his case they obviously feel his experience and connections are of some value and are willing to give him a part of the firm to acquire that experience.