Why the rich have an advantage in business (and it's not an unfair one)

When I was in my early 20s I made $30,000/year at my first full time job and had no debt, which is an excellent financial position to be in for a recent college graduate. At the time, $30,000/year was my baseline; if I put in some money and started a business that would pay myself $30,000 the first year, $40,000 the second, and $80,000 the third, that would be a major success and an attractive career path. Scaling to $100,000 or $200,000/year is a moonshot.<br><br>Speaking as a single guy, I can imagine working 8 hours a day the first two years and 24/7 the third with my life savings on the line, and I imagine a handful of other people my age would do the same, but the pool of hard workers who are willing to take that risk isn't endless. That means there are some businesses I could never accomplish with the resources available to me.<br><br>Conversely, if someone is making $300,000/year and already has another source of income, that's their baseline. The biggest risk is losing the investment capital, but all the years of hard work will be donated if the company goes belly up, and you can probably try again. If the company is successful and grows to $1M/year, you just went from making triple the national average salary as an employee to 10x as an entrepreneur, and you had to risk less of your life capital for that opportunity compared to me at $30,000/year.<br><br>Similarly, someone making $10M/year has access to businesses that the $300,000/year guy can't touch, and so on. For the upper echelon, if the company grows to $100M/year or $1B/year, not only are they more likely to have an idea that can scale to that size, but the number of years of sweat equity they need to put in is much lower. So their success was partly the result of them putting in a few years of work and partly the result of the idea and resources available to them.<br><br>It's not as though the opportunity needed to be risked on the smaller capital idea, but if it were, that would be a barrier to entry because someone who isn't well off would have to risk their personal security to pursue it.