A huge part of the VC job surrounds the entrepreneurship. Only former entrepreneurs will be able to interview a startup team and detect potential fatal issues in the team work. Only former entrepreneurs understand the anxiety/dynamics of different rounds of startup fundraising that they know what the best angle is for them as a VC to work with a particular startup. Only former entrepreneurs know why hiring in a startup is even more crucial than in a big corporate and how a VC could help the portfolio company in this regard. Only former entrepreneurs know that working capital is not just "Current Asset minus Current Liabilities" on the Balance Sheet but rather a living hell when a startup is growing like crazy but there's only $10k left in the bank account. Even former entrepreneurs that didn't make it to IPO know a tech IPO process more than any non-M&A investment banker since they would have gone through some IPO evaluations when they worked on the exit of their own firms.
What's more important: only former entrepreneurs know that the future is unknown, since they have at one point of their life helped change the existing industry structure and created a micro — or major, if your last name happens to be Zuckerberg or Brin — new future off the set path. And because former entrepreneurs know this so well, they would be able to stay truly open-minded about any crazy proposals and recognize better the kind of people able to execute those proposals.