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

Journal article

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.

Authors: Kampmann, D

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford University Press
• Journal: Socio-Economic Review
• Pages: mwaf065
• Article number: mwaf065
• Publication date: 2025-10-15
• DOI: 10.1093/ser/mwaf065
• EISSN: 1475-147X
• ISSN: 1475-1461
• Language: English
• Keywords: USA; saving and capital investment; G24 investment banking; corporate finance and governance; technology; ratings and ratings agencies; corporate governance; P political economy and comparative economic systems; brokerage; ideology; O16 financial markets; venture capital; competition