Willingness to invest in these ventures for a one in ten chance that one of them will yield 10x+ returns is only part of what creates the venture-capital: those willing to make that kind of investment and who succeed are, without an IPO, getting their reward in profit dividends over time rather than as one lump sum when the venture goes public, which means that the prospect of re-investing in a given year is the profit dividend yield rather than the funds from the IPO.
The idea that the stock market is primarily about raising funds for real capital investment is a fantasy of neo-classical textbooks, because neo-classical economics is incapable of modeling economic power, and so are incapable of explaining markets where what is being bought and sold is economic power. They therefore have to pretend that stock markets are something other than what they are. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
