Risk has little to do with it for the top firms (like Sequoia) that have built the networks and reputation to attract the top companies. Yes, they take some risk on individual companies, but across their entire portfolio the risk is not that great compared to the expected value. The VC industry is winner take-the-best, just like the tech industry as a whole. The top firms are not taking risk proportional to their reward.

It is true that the VC sector underperforms. That is because the lower tier firms are just pretenders. They are funding second tier companies, and second tier companies are not good enough in these winner-take-most markets. These firms should shut down and limited partners should stop burning their money by investing in them.

My disagreement with Piketty (judging from the summaries - I haven't read him yet), is that the cause of inequality is not capital versus labor. The cause is the rise of winner-take-all-dynamics, which causes stratification within sectors.

Also I should note that I am not saying their is no risk in investing. Even for Sequoia there is risk. I am that the the risk that exists does not cause high returns. I am that this statement is wrong: "to the extent capital reaps high returns, it is by assuming risk." Sequoia reaps returns by avoiding risk, if it had even better vision into markets and companies it could reap even higher returns.