The Winner Takes It All

I. The Founding Legend

Every startup has a founding legend. It always sounds roughly the same: two, three, four people meet — in a garage, a shared flat, a coworking space. They have an idea, passion, and nothing to lose. They work day and night, they risk everything, they believe in their vision. And then, after years of sacrifice, comes the breakthrough. The story ends with an IPO, champagne, and the sentence: “We made it.”

What the legend conceals is the pronoun. Who exactly is “we”? For as a rule, what stands at the end is not a team that won together, but a single person who got everything — and several others who watched as the results of their work changed hands.

The winner takes it all. The rest get an anecdote.

II. The Division of Roles

In every startup there is an invisible hierarchy. It follows a single rule: whoever holds the connection to the outside holds the power in the end.

There is the engineer who builds the product. Without them there would be nothing to sell. But they have a weakness: they understand their product better than the market, and they trust that quality will prevail.

There is the salesperson who brings in the customers. They talk where the engineer calculates. They promise where the engineer doubts. They bring the money that keeps the company alive.

There is the third person — sometimes a founder, sometimes someone who joined later — who has the connections. To the investors, to the bank, to the lawyer, to the one decision-maker who approves the big contract. They build nothing, they sell nothing, but they know everyone who matters. And they know how contracts work.

In the founding phase these roles seem equivalent. But as soon as money enters the picture, the tectonics shift. And they always shift in the same direction.

III. The Mechanics of Displacement

The displacement does not begin with a coup. It begins with a contract.

The first investor wants someone who speaks their language: returns, valuation, exit strategy, dilution, liquidation preference. The engineer signs the contract that the connection man has negotiated, because they trust him and because they want to get back to work.

In this contract stands everything that will later happen. The shares. The vesting clauses. The good-leaver/bad-leaver provisions. The drag-along rights. The anti-dilution rules for the next financing round. Terms the engineer hears for the first time and understands for the last.

Six months later, the product works. And the contract works too — just for someone else.

IV. The Currency of Connections

In classical economics there are three factors of production: labour, land, capital. In the startup economy there is a fourth that dominates all others: connections.

Venture capitalists do not invest in ideas — they invest in founders they know, who are recommended by people they know, who attended the right conferences, who went to the right universities. The network reproduces itself, and it selects by a criterion that has nothing to do with the quality of the idea: belonging.

The connection man in the startup has belonging. The engineer has an invention. Both are valuable, but only one gets paid.

V. Oppenheimer’s Distinction, Revisited

The engineer works with the economic means: they create something that did not previously exist. The connection man positions himself between the creator and the market — exactly like the capital in the first essay of this series. Intermediation is an economic service as long as its compensation does not exceed the compensation for creation. When the intermediary earns more than the creator, the intermediation has ceased to be a service. It has become the political means.

VI. The Exit Arithmetic

When the startup is sold or goes public, the arithmetic reveals what the language concealed.

The liquidation preferences: the investor gets their money back first. The dilutions: with each financing round the founders’ stake falls. The engineer who started with 33 per cent may hold only eight after the third round. The vesting clauses: if the engineer “voluntarily” leaves the company — for instance because they notice their role is increasingly marginalised — their unvested shares are forfeited.

Industry standard. The phrase with which every structural injustice is normalised.

VII. The Pattern Behind the Pattern

Everyone who has ever worked in a startup knows at least one story. The brilliant programmer whose options turned out to be worthless after the investor’s liquidation preference. The founder who was pushed out of her own company after Series B because the new investor wanted a “more experienced CEO”. The CTO who learned after the exit that the CFO had a special arrangement nobody knew about.

But the stories conceal the pattern. And the pattern is the same as in the first essay: the creative mind creates the value, and capital — here in the form of the connection man — skims it off.

VIII. The Narrative of Risk

The standard justification: whoever risks more deserves more. But this calculation is wrong. The investor risks money they have — and in a diversified portfolio can afford to lose nine out of ten bets as long as the tenth pays enough. Their risk is calculated, spread, tax-deductible.

The engineer, by contrast, risks something no actuary can calculate: their creative energy, their best years, their health, their relationships, their chance to bring the one idea they have into the world. If the startup fails, they have not only lost money — they have lost time that will not return. But this risk is invisible because it cannot be expressed in euros. And what cannot be expressed in euros does not exist in the language of capital.

IX. The Blind Spot of Startup Culture

Startup culture has no language for this problem. It has myths instead: the myth of the brilliant founder who combines everything in one person. The myth of meritocracy, where the best wins. The myth of “we’re all in this together”. In reality, some are more “in” than others — but everyone wears the same T-shirt.

X. Oppenheimer’s Solution, Applied

As long as access to capital is monopolised — through closed networks, through the exclusivity of the venture capital scene, through the information asymmetry between those who make contracts and those who make products — the winner will take it all. Not because they deserve it, but because the structure provides for it.

As long as this does not happen, the startup world will remain what it always was beneath its colourful surface: a mechanism in which creative energy flows from the bottom upwards — and the money from the top upwards.