They can absorb a tremendous amount. The total market cap of the S&P is ~$18.5 trillion. [0] Total VC investment is ~$50 billion annually. [1] Let's say tha

They can absorb a tremendous amount. The total market cap of the S&P is ~$18.5 trillion. [0] Total VC investment is ~$50 billion annually. [1] Let's say that each VC investment returned a 3X return (a reasonable average) then the S&P would only need to dilute itself by 1% per year to buy the entire stock of VC companies in that year. Another way to look at it... In just one quarter [2] the S&P 500 spent more than $150 billion in stock buybacks, that's triple the annual amount of VC investment. There is a tremendous amount of room for the market to absorb innovative real companies. [0] https://en.wikipedia.org/wiki/S%26P_500_Index https://en.wikipedia.org/wiki/S%26P_500_Index [1] http://nvca.org/pressreleases/annual-venture-capital-investment-tops-48-billion-2014-reaching-highest-level-decade-according-moneytree-report/ http://nvca.org/pressreleases/annual-venture-capital-investm... [2] http://www.factset.com/websitefiles/PDFs/buyback/buyback_12.15.15 http://www.factset.com/websitefiles/PDFs/buyback/buyback_12....