This looks to me like a rational solution for the problem of reasonable compensation for initial risk in a new business of any kind. The idea that the initial risk should be compensated forever (at a minimum ) at a premium determined by that initial risk has never been reasonable — like Bill Gates continuing to receive millions a year for founding Microsoft, long after that initial risk was more than fully compensated.

This isn’t only a moral issue. That ongoing bloated compensation represents money that could be nurturing new entrepreneurs.

The question is, how can it be instituted? Why would any entrepreneur forego the greater compensation the current model offers?

Off the top of my head, his paradigm does strike me as the basis for a formula for a wealth tax on ‘excess’ compensation (that had not been funneled into new investment).