The political economy of venture capital

Winners-Take-All and Founder Control

Bibliographic Data

ID5671963
AuthorsDavid Kampmann (0000-0002-5118-4263, London School of Economics and Political Science, corresponding author)
Year2025
Volume24
Issue2
Pages921-949
Publication date2025-10-15
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSocio-Economic Review (JOURNAL)
Journal identifiersISSN: 1475-1461 • E-ISSN: 1475-147X
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ser/mwaf065
OpenAlexW4415217321
LanguageEN
Citations received6
References cited20

In many US Tech corporations such as Meta, Alphabet, and SpaceX, founders still hold shareholder voting control. How can we better understand the concentration of insider control in Tech? Drawing on quantitative and qualitative data to examine the rise of US start-up investments post-dotcom, this article demonstrates that a small group of new venture capital (VC) entrants played a key role in advancing founder control in Tech to win deals against established VC firms and make outsized capital gains. I argue that the VC market follows a winners-take-all logic, which facilitated the uptake of founder control in Tech via dual-class shares because of the success of new VC entrants and early founder-controlled tech firms exiting between 2010 and 2014, and the growing investments by nontraditional, "passive" investors post-2010. This matters because the winners-take-all logic reinforces capital concentration among leading VCs while many Tech monopolies are now controlled by a small tech elite fraction

Capital (architecture) · Control (management) · High tech · Initial public offering · Insider · Shareholder · Venture capital · Voting · Corporate Finance and Governance · Private Equity and Venture Capital · State Capitalism and Financial Governance

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