The political economy of venture capital: winners-take-all and founder control

Kampmann, David (2025) The political economy of venture capital: winners-take-all and founder control. Socio-Economic Review. ISSN 1475-1461

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Abstract

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.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	LSE
Subjects:	J Political Science H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
Date Deposited:	17 Oct 2025 15:30
Last Modified:	17 Oct 2025 15:30
URI:	http://eprints.lse.ac.uk/id/eprint/129826

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