General Discussion

The real reason Silicon Valley hates Lina Khan
ALISTAIR BARR
05 August 2025 03:25 PM

You'd think venture capitalists and startups would support an antitrust crackdown on Big Tech. These behemoths regularly squash promising young startups, using their unrivaled power over users, data, and various digital markets.

How VCs make a living
The real reason VCs and their advisors hate limits on M&A is that they threaten the main way they make money.

The industry loves to pretend it's in it for the long haul and wants to build enduring businesses that disrupt the goliaths of the sector. But in reality, M&A deals are the main way VCs make money from their startup investments.

While they tweet publicly about changing the world, they often privately push founders to sell out to Big Tech. So if anyone gets in the way of such transactions, they become very twitchy.

"FDIC insurance for bad bets"
Thibodeau said, pre-Lina Khan, and before Republicans decided totarget the tech industry, Google, Facebook, and Microsoft were a kind of welfare office for founders and their VC sponsors.

"M&A was basically FDIC insurance for bad bets," he added. "If it crashes, rich uncle Sundar or daddy Zuck will bail us out."

At least legendary VC Paul Graham made some effort to be honest here, although he could have been clearer that Y Combinator relies heavily on larger tech companies buying the startups he backs.

"Startups are risky. Sometimes when you keep rolling the dice things turn out well. Sometimes not. But founders should be able to decide for themselves when to stop," he wrote in response to Khan's post on X.

We want our M&A fees
For anyone else involved in tech M&A, such as investment bankers and deal lawyers, any limits on transactions mean fewer commissions and other fees. So, of course, they're inclined to criticize antitrust enforcement — whether deals are good for consumers and society or not.