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I do think they get a disproportionate share of the reward. And you can't argue that it's because the network contributes more; it's purely because the network

• nybble41 8y ago
  So your argument is that venture capitalists are idiots, throwing money at people building networks and not expecting anything of similar value in return? VCs are not in the habit of throwing money away. When a VC-funded venture succeeds, the VCs take the lion's share of the rewards. Accepting VC funding is not a quick path to easy riches. (Of course, the VCs are also taking on the majority of the risk if the venture fails, as happens more often than not; in the end, over enough ventures, it all balances out.) Capital is not money, but rather durable goods which contribute to more efficient production. It is the networks which are the capital here. Money can be used to buy capital, but only if someone goes to the trouble of designing that capital first. There is plenty of available labor looking for productive work to do, just as there are plenty of VCs searching for ventures likely enough to succeed to justify the investment. It is a lot easier to find people able to do whatever work is required than it is to find the right capital (networks) to organize them and enabled them to do the right work productively. Both capital and labor are needed. The networks receive a greater portion of the reward because they are more scarce than labor as well as contributing more to overall productivity.