How does improved entrepreneurial equity financing affect top wealth inequality? On the one hand, better equity financing enables entrepreneurs to scale up, which tends to raise top wealth inequality. On the other hand, better risk sharing allows entrepreneurs to reduce the idiosyncratic volatility in their wealth portfolios. This risk reduction lowers wealth inequality by making extreme wealth trajectories less likely and by weakening entrepreneurs’ precautionary savings motive. The novel insight in this paper is that which of these two effects dominates depends crucially on how much economic activity is reallocated to entrepreneurial firms from elsewhere in the economy when entrepreneurs try to scale up. When this reallocation is large, wealth inequality rises rapidly as equity financing improves, and the model makes sense of several empirical trends, most notably the dramatic rise of firms with a history of venture capital backing. The results suggest that improved risk sharing through better equity financing could have been a quantitatively important contributor to rising wealth concentration.