Whether a company is "rent seeking" vs. "value creating" has nothing to do with whether it's a pre-existing security or a startup. If investors put $1B into a

Whether a company is "rent seeking" vs. "value creating" has nothing to do with whether it's a pre-existing security or a startup. If investors put $1B into a company that manufactures commodity widgets, and the company spends that $1B on a factory that produces $100M worth of widgets per year (with no market cornering, monopoly, etc.), this is obviously a value-creating business model. If the original investors sell their shares to passive index investors, that doesn't magically make the underlying business rent-seeking. Twenty years later, the company might still be doing basically the same thing, and the securities might have changed hands many times, but it's still a $1B company producing $100M of genuine value per year. Conversely, if investors put $1B into a startup whose business model is to build a monopoly, starve the competition, and then jack up the prices (as Uber is allegedly doing), then that's obviously a rent-seeking business model. It's a rent-seeking business model from the very beginning. It doesn't have anything to do with how long the company has been in business. There's a valid debate to be had over what fraction of the returns on stocks come from value-creation vs. rent-seeking, but the "pre-existing security vs. startup" distinction has nothing to do with it. Personally, my hunch is that the majority is genuine value creation. Every factory, farm, train car, power plant, office building, etc. is an asset that creates genuine value.