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Illustration: Aïda Amer/Axios

The generally accepted form of a U.S. startup is now that of a monarchy. Companies and their founders are increasingly indistinguishable — a state of affairs that isn't going down well with workers agitating for a seat at the table.

Why it matters: It's nothing new for companies to be dominated and controlled by a single individual — Rupert Murdoch, Sumner Redstone, John Malone, and other media moguls spring naturally to mind.

  • What's new is that this time around, there doesn't seem to be any kind of valuation discount when a company lives at the whim of its founder. Quite the opposite.
  • Tesla is a prime example of a company that trades at a premium thanks to the imperial predilections of its CEO.

What they're saying: "When you get to a certain count — customers or employees or both — there's no pleasing everyone," wrote Basecamp founder Jason Fried in a recent blog post trying to take back more control of his company. "You can't — there are too many unique perspectives, experiences, and individuals."

  • Similarly, Patreon founder Jack Conte recently uploaded a six-minute YouTube video explaining his decision to lay off 36 employees, despite recently closing a $155 million fundraising round.
  • The video features Conte saying "I," "me," or "my" no fewer than 31 times, or about once every 12 seconds on average.

Context: It is now normal for tech companies to go public with a dual-class share structure giving control to the founders — even though doing so makes that company ineligible for inclusion in the S&P 500 index.

  • Companies choosing the dual-class option (or having even more classes than that) include Coinbase, Snap, Airbnb and Bumble. All of them are associated closely with their respective founders.
  • These founders are following the trail blazed by Mark Zuckerberg, who has retained dynastic control of Facebook for himself despite owning only a small fraction of the company. (Zuckerberg's control does not end even when he dies: He can bequeath it to his daughter, should he so wish.)

The bottom line: The cult of the founder has infected both the public and private markets to such a degree that investors no longer require a discount for allowing such a monarchical system.

Go deeper

CEOs are finding new ways to court and communicate with retail investors

Illustration: Eniola Odetunde/Axios

As trading volume from retail investors continues to grow, public companies are finding it more important than ever to speak directly to this group.

Why it matters: Companies are bypassing middlemen to reach their intended audience and tell their stories directly. 

Apr 29, 2021 - Technology

Facebook touts big business bets with 2020 in rearview

Illustration: Sarah Grillo/Axios

Facebook's earnings call Wednesday was a huge departure from its pitch to investors over the past year. Instead of reiterating its progress in trust and safety, the tech giant touted investments in innovation and new technology.

Why it matters: A slew of public relations crises over the past year had clouded Facebook's ability to position itself to stakeholders as a tech innovator.

Updated 2 hours ago - World

Death toll mounts as fighting between Israel and Hamas intensifies

Palestinian Muslims exchange wishes for Eid al-Fitr, marking the end of the holy month of Ramadan, near a razed building in the northern Gaza Strip town of Beit Lahia, on May 13. Photo: Majdi Fathi/NurPhoto via Getty Images

At least 109 Palestinians and seven people in Israel have been killed since recent fighting between Israel's military and Hamas began Monday.

The big picture: Israel began massing troops on its border with Gaza on Thursday, launching attacks from the air and ground as Hamas continued to fire rockets into Israel.