[lumost]

I believe Warren Buffet was opposed to robo-trading strategies for this exact purpose. If the bulk of the money is going to fund anything with a market cap greater than $X, then it is useful for VCs to pump a stock up to $(X + Y) market cap to acquire funding via rebalancing.

From a VC perspective, you can exit as other funds rebalance into the stock at the inflated valuation.

[wbl]

The beauty of market cap weighting is only entrance or exit forces a rebalance.

[lumost]

Would be quite interesting if WeWork et. al. were schemes by the financial backers to capitalize on cap weighting strategies. The folks involved would not have been opposed to this in the past.