VCs 'Eat the Meat', Retail Investors 'Wash the Dishes': Is the Crypto Plot About to Unfold in the U.S. Stock Market?
VC "Eat the Meat," Retail Investors "Wash the Dishes": Is the Crypto Plot Repeating in US Stocks?
The article argues that the US public equity market is increasingly failing to provide retail investors with access to high-growth, transformative companies. Historically, public markets allowed average citizens to participate in wealth creation by investing in early-stage companies like Apple and AOL, which generated life-changing returns. However, a significant trend of companies staying private for extended periods has emerged. This delays their IPOs until most of their explosive growth has already been captured by venture capital (VC) firms and private investors.
As a result, by the time companies like Uber or OpenAI go public, their valuations are already extremely high (e.g., Uber at $89B, OpenAI targeting $830B), leaving minimal growth potential for public market participants. This system excludes the median American household, which is legally barred from private market investments, from profiting from the very companies they help build through consumption and labor.
The author warns this dynamic creates a "K-shaped economy," exacerbating wealth inequality and risks reverting capitalism to a "neo-feudalism" where a small elite controls the new means of production (equity in transformative companies). The number of US public companies has halved since 1996, while the economy has grown, indicating a systemic shift. The public markets risk becoming merely a liquidity tool for VCs to exit mature investments, undermining the social contract that allowed broader societal participation in wealth creation.
marsbit01/24 05:43
