The problem with this argument is that VCs trade the risk of the investment for the chance at future profits by being part owners of the company who can share in the success.

You're asking people to give money, and take the risk of losing it, but without actually giving them anything in return.

Maybe if Riot Pinball and the other boutiques were selling stock I could see the argument. They're not, they are selling an IOU ticket that has zero legal worth.

I think the difference is that VCs take a risk getting in early to get a much bigger return later, but the early buyers are taking a risk with no (or very little) benefit since they can get the same machine later with zero risk.