With their detailled filters and so on. any research you read before?
Does anyone know how much VC firms contributes to wealth inequality?
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Re: Does anyone know how much VC firms contributes to wealth inequality?
#2It's a lot. Think about it this way with taxis. That was an economy that prior to ride-sharing stayed entirely within the local economy. Now there is a giant funnel the takes most of that money and funnels it to Silicon Valley and investors. That money exits the local economy for the most part now. And take this and apply it to everything tech.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#3It's a lot. Think about it this way with taxis. That was an economy that prior to ride-sharing stayed entirely within the local economy. Now there is a giant funnel the takes most of that money and funnels it to Silicon Valley and investors. That money exits the local economy for the most part now. And take this and apply it to everything tech.
So we get a better service and give it to wealth inequality. It's like how they built US cities for cars. Ways change but formula is simple?
Re: Does anyone know how much VC firms contributes to wealth inequality?
#4Wealth inequality is not an important thing to worry about by itself. The Gini coefficient undergoes a U-shape growth curve in economies as they move from under-developed, to developing, to developed. A better thing to worry about is wage growth and wealth growth among the bottom 50% of the population. Correlating that metric to the Gini coefficient seems like an exercise for an ideologue not a rigorous thinker.
Speaking to your point about VCs. They represent a minuscule amount of capital investment in the US economy. Of course, on this website, they predominate thought and discussion. However, the simple fact is that VC money is a rounding error in overall capital investment.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#5It's a lot. Think about it this way with taxis. That was an economy that prior to ride-sharing stayed entirely within the local economy. Now there is a giant funnel the takes most of that money and funnels it to Silicon Valley and investors. That money exits the local economy for the most part now. And take this and apply it to everything tech.
Food delivery is an other great example. Companies extract huge cut, people doing the hardest work are not significantly rewarded. And in the end whole thing have at least some if not significant challenges in sustaining itself.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#6It is equally important to learn how much VC firms contribute to improving quality of life, creating jobs etc.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#7From my European perspective, VC capital increases social mobility for the "engineering class" and the builders of society. Those who have talent but no access to capital.
The alternative is, that there is no VC capital and only people who are already wealthy are allowed to undertake entrepreneurial ventures. Is that somehow better?
So I think VC firms reduce wealth inequality over all.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#8Well, let's figure out such an experiment.
Compare areas with VC funding and areas without VC funding. The bigger the barrier, the better the data. I think it doesn't do to compare American cities as the barrier is so low. It would probably have to be culturally and economically similar countries, one with lots of VC funding, another without.
I would count the number of unicorns. Do unicorns remove or add inequality? I don't know, but whatever it is, it's the multiplier. Unicorns tend to pay in the top 5-20% of salaries for engineers, and still the top 50% or so for ops and gig workers. There's also a lot of businesses created to handle infra, whether it's logistics or software.
Gini data seems to be highly lacking. Ideally, you'd measure around the VC-sponsored areas and compare it to non-VC covered areas. But this is also difficult because companies like Stripe affect things far beyond their HQ. That said, country Gini data is often missing, and city data even rarer.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#9It's a lot. Think about it this way with taxis. That was an economy that prior to ride-sharing stayed entirely within the local economy. Now there is a giant funnel the takes most of that money and funnels it to Silicon Valley and investors. That money exits the local economy for the most part now. And take this and apply it to everything tech.
I hated taxis lol. I don't like ridesharing companies either, but taxi companies where I lived were a cartel. Taxi groups would camp at train stations and greatly overprice beyond what was legal. I believe even in the US, there were things like taxi medallions and a whole economy around medallion loans which really don't sound like they contribute to equality.
I was also a big fan of Uber in its time, and drivers would tell me stories of how they quit a job at the factory so they could be better paid driving Uber. One guy even quit his bank manager job because it paid that well, but sadly he is now a victim of enshittification.
Gig work also resulted in gentrification of large areas, because work was actually there. It was something to do after hours. Crime dropped in some places because it was easier than robbing someone.
I'm not entirely optimistic this is how it will be; centralized power is dangerous and AI will mess things up badly. But for recent data, I feel like it's helped inequality a lot.
Re: Does anyone know how much VC firms contributes to wealth inequality?
#10VCs more often than not just pick who they want to run a company in some vertical. So like, an AI company for lawyers, they just go find some Harvard guy and fund him. It increases wealth inequality, bc they choose who to write the check to. Hard charging entrepreneurs from underdog backgrounds do get funded, but its way harder for them, many hurdles to clear.