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The source of that capital is the banks ---where other middle class people have invested a portion of their left-over pay.

You are apparently out of touch with where venture capital actually comes from. It isn't the banks; they only loan spending money for huge established enterprises. Most of the venture capital come from ad hoc groups of very wealthy individuals, not from the banks. The banks are not part of the dynamo of new enterprise and innovation; "risk" isn't in their vocabulary unless preceded by "no" or "low". Wealthy people fund all the small and medium businesses that become Big Businesses.

Whatever gave you the idea that banks actually fund business? Have you ever tried to get a bank to loan you $10 million to capitalize $100 million in contracts when you are only worth $20 million? Puh-lease. Wealthy people will step up to the plate every time, banks require you to have already made the money before they'll let you borrow it (that "collateral" thing). Apples and oranges. Banks and VC serve two entirely different functions in big business.

We're still talking about wealth that was produced in a middle class country. Once it's not --all that venture captital moves elsewhere. Much of our wealth class got wealthy from working hard, moving up through the middle class and they became the venture capitalists. Once we give up the middle class and have the aristocrat or elite class and the poor class all that goes away.

I know people who got small business loans, and also people who started their business without loans. Look at the guy who started Domino Pizza for example --- many of the big businesses we see today were started small ----they did not have vast amounts of money handed to them. Henry Ford did not have venture capitalists handing him money either ---he was once a small business owner that did well selling cars to a middle class society.