I don't really agree with the article's argument that it's so bad if this or that group becomes wealthy. The government can easily solve that through taxation i

I don't really agree with the article's argument that it's so bad if this or that group becomes wealthy. The government can easily solve that through taxation if it so chooses. I think the more important piece of information embedded in articles like these is the truth of how venture capital (and capitalism generally) works. I know a couple of the people listed in the web of connections here. In general, I'd say they view their exceptional talents as responsible for their investment success. They are undoubtedly smart and capable people, but the key element in their success is that they get the first look at startup ideas and venture investments because of their social status in silicon valley. Top VCs can't really outperform the market if forced to invest in a level playing field. They know this, so they focus more on the pedigree of deals than on the actual ideas. That's how you wind up with big-name people investing in frauds like Theranos and obvious con-jobs like U-Beam. I don't see anything wrong with this necessarily, but it's worthwhile to point out what's really going on. That way, young entrepreneurs and budding venture capitalists know what they're getting into. The truth of the matter is, if you want a sure way to make money, you should join a firm who has this kind of access. Go work at Goldman Sachs or Kleiner Perkins. If you eschew that path, realize that you are actually taking on far more risk than averages might imply, since you are choosing not to have the first look at ideas and deals. In fact, you'll likely do rather poorly. Long history suggests the only way to consistently make money in a level playing field such as public markets is the Buffett way -- essentially using behavioral economics to bet against emotional mistakes made by market participants at market highs and lows. From a policy perspective, I've long thought you could argue for a much higher capital-gains tax on any gains in excess of 20% per year on investments (more or less what Buffett has returned). The rationale is that such gains must have been generated by labor, luck, connections, or some combination of the three. This is not to suggest there is anything unsavory about such returns -- it's just that they are not broadly available.