I just found this out about Michael Bloomberg: He is a "self made billionare"

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74. there will always be people who will fund a good idea?

oh, no, not at all.

funding a business requires a great deal of trust and faith not just in the idea, but in the people involved being able to execute on it, generate a profit from it, return it to investors in spades, and it even requires faith that the people involved will be able to maintain investor confidence along the way.

go through any big business you will find the rank and file have hundreds of good ideas that never get acted upon. a lot of poor people never get close to getting venture funding even with great ideas. and as a side note, many people could develop great ideas if only they had exposure to large stream of wealth. it's hard to come up with ideas in a vacuum, but if you are in a position to observe a process or a market up close, you may be able to figure out how to do it better. but that's hard if you don't have the privilege of being able to observe the problem in the first place.

but, again, making big money in america is only partially about hard work and good ideas.

if the idea comes from someone who is white and male and has enough money to put a meaningful chunk into the business, that goes a long way to getting investors comfortable, even though it has zero to do with how good the idea is. it also helps to have useful contacts, which itself is often a function of wealth and other privilege.



ordinary people are paid based on work effort and the occasional good idea. but the really big bucks go to people who leverage ownership of production and distribution and financing.

look at how much money mitt romney made. mostly he took other companies and exploited management's desire to own the company, so he funded leveraged buyouts where rmoney's firm would be paid back with huge interest first, and the management had to hope and pray that they could generate enough profit quickly enough to repay rmoney's firm before time ran out. (different deals were structured differently, but mostly with a similar concept.)

so whatever great idea management had, rmoney was able to extract a huge profit, sometimes even when the company with the good idea failed, because they didn't succeed wildly *enough* to both pay off rmoney's firm and also survive themselves.

there are many examples of good economic, good business ideas, that fail because the financing was wrong or the corporate structure was wrong or whatever. that's economically silly, but more to the point, it means the people with the good ideas often don't wind up with much money, in fact, sometimes they go bankrupt, while the people with the financing and production and distribution make a ton of money off that idea.