Yes, but it's also a good deal for the startup too, because it incentivizes people like Tim to do raise funds for them from smaller investors. It's true smalle

Yes, but it's also a good deal for the startup too, because it incentivizes people like Tim to do raise funds for them from smaller investors. It's true smaller guys make less than they would investing directly. But only if it were feasible to directly invest a couple thousand dollars in your own picks. The economics of that don't really work out for either party.