TLDR:
- The author spent 19 months in a Silicon Valley startup, revealing how venture capital investors drive tech innovation
- Venture-backed startups face pressure to increase valuation, leading to organizational issues and user harm
In “Behind the Startup: How Venture Capital Shapes Work, Innovation, and Inequality” by Benjamin Shestakofsky, the author provides insights into the inner workings of venture-backed startups. Through his experience at AllDone, a successful Silicon Valley startup, Shestakofsky highlights how the imperative to rapidly increase a startup’s valuation driven by venture capital investors results in relentless experimentation and organizational problems. With a majority of workers as independent contractors without stock options, the wealth generated is not equally shared. The author suggests alternative models of funding innovation, such as privately owned tech companies like craigslist, nonprofit organizations like Amara, and platform cooperatives like Up & Go, as ways to distribute the benefits of technological change more equitably. Shestakofsky also proposes policy changes, such as eliminating tax loopholes for VCs and strengthening labor rights, to curb the influence of finance capital and promote a more diverse innovation portfolio for societal benefit.
