He's trying to make the point that the only path to success in the software industry is to work insane hours, sleep under your desk, and give up your one and only youth, and if you don't do that, you're a pussy. He's using my words to try and back up that thesis.
I hate this, because it's not true, and it's disingenuous.
What is true is that for a VC's business model to work, it's necessary for you to give up your life in order for him to become richer.
Follow the fucking money. When a VC tells you what's good for you, check your wallet, then count your fingers.
He's telling you the story of, "If you bust your ass and don't sleep, you'll get rich" because the only way that people in his line of work get richer is if young, poorly-socialized, naive geniuses believe that story! Without those coat-tails to ride, VCs might have to work for a living. Once that kid burns out, they'll just slot a new one in.
I did make a bunch of money by winning the Netscape Startup Lottery, it's true. So did most of the early engineers. But the people who made 100x as much as the engineers did? I can tell you for a fact that none of them slept under their desk. If you look at a list of financially successful people from the software industry, I'll bet you get a very different view of what kind of sleep habits and office hours are successful than the one presented here.
So if your goal is to enrich the Arringtons of the world while maybe, if you win the lottery, scooping some of the groundscore that they overlooked, then by all means, bust your ass while the bankers and speculators cheer you on.
Instead of that, I recommend that you do what you love because you love doing it. If that means long hours, fantastic. If that means leaving the office by 6pm every day for your underwater basket-weaving class, also fantastic.
Update: Followup here.