As financiers of the innovation economy, we’re noticing that tech is getting a bad rap. From Washington’s crackdown on the tech giants through antitrust enforcement and data privacy regulation, to the fear of automation’s effect on our jobs, to the vilification of Silicon Valley and, by extension, venture capital (editorial note: the two are not one entity), backlash toward tech is abounding. The popular narrative is littered with superlatives and hyperbole and is dominated by the sort of polarized thinking that fails to unite the dichotomy of the industry’s positive and negative qualities into a realistic consideration of the whole. To be fair, this style of thinking is a common defense mechanism and a rational response to threats posed by the consolidation of money and power into a few companies, the feeling that social media is making people more isolated and less connected, and the complex opacity around ever-changing technologies and how they might impact our society, basic human needs and constitutional rights – least of all our privacy, or how we provide for our families.

Policy and Regulation

In one sense, what’s new is old. While technology has never been as societally omnipresent as it is today, the antitrust issues facing Big Tech companies today preceded their rise to dominance and are a familiar player in the history of the industry. In 1969, the government launched an antitrust suit against IBM that would last 13 years. Although the suit was dropped in 1982, IBM’s market share would drop from 70% to 62% and “Big Blue” was unseated, giving a nascent Microsoft the entry point to become a technology behemoth in its own right. By 1998, Microsoft would face its own antitrust suit from the government, the concern being that its browser monopoly (in addition to its operating system and major application monopoly) would position it as the sole controller of the Internet and its future. The government eventually won, with a tiny Google being the most obvious beneficiary, and so on. Parallel stories can be found in any number of historically innovative industries: steel, oil, automobiles and airlines, to name a few. Monopolies are the enemy of competition, and competition fuels innovation by virtue of the fact that it is required to enter the market and compete. We are strongly in favor of free markets and competition for startups and incumbents alike, but are uncertain that regulation is a cure-all for this issue.

There are certain factors that are unique to the current landscape. Official data shows that business dynamism, or the process by which companies are born, fail, expand and contract, is slowing, with startup creation declining and jobs created by companies less than one year old dropping from 4.1 million in 1994 to 3.0 million in 2015, a reduced rate of entry that some attribute to the monopolies exerted by Big Tech companies. Complicating the issue is the fact that measuring monopoly has traditionally involved factors like price and market concentration. First, a number of these large technology companies are free to consumers (one might argue that we pay with our data and our time, a fact viewed by certain members of society as the price of doing business and by others as deeply disturbing).  

Second, as a 2016 article from the Economist suggests that the trend toward market concentration is not unique to the technology vertical, but rather widespread across the American economy, with the weighted average share of the top four firms across 900 sectors rising from 26% to 32% of total industry revenues from 1997 to 2012. While we take the point, a 6% increase hardly seems significant enough to warrant the sort of broad scale rhetoric we are seeing in the media and on The Hill. The implication of such data is explored in more detail by the Brookings Institution, which published a 40 page report on the subject.


One of the report’s most fascinating takeaways is that policy can both defend competition at the federal level through antitrust regulation, while inhibiting competition by limiting market entry at the local, state and federal levels. This suggests that policy must be carefully considered, as the regulation of technology is clearly nuanced and can have divergent outcomes.

The Philosophical Debate

Technology has, since its genesis, inspired both hope and fear in society. We adopt a tempered optimism toward the industry and its disruptions, which generates substantial benefits to society in the form of increased economic growth, longevity, health, quality of life, income and productivity. Nevertheless, we take a fair inventory of what we see around us as stewards of capital that funds new and developing technologies.

While the tech giants represent potential acquirers of the startups we fund (directly or through our underlying managers) and generate use cases that provide fertile ground for startup creation, we observe with increasing frequency that their interests seem to diverge from those of the entrepreneurs and managers with whom we partner. While Google and Facebook and Amazon are all venture-backed, at what point does the venture capital industry cease to be culpable for their sins? As technology-focused investors sitting outside of Baltimore, Maryland, we don’t feel any particular affinity or responsibility for the behavior we’re observing.

The thing about technology is that it doesn’t exist without society, and, as an extension, embodies all of the potential for good and for evil that lies in each human being. We recognize that there are bad companies and bad people, but technology itself is merely an instrument – one that can be used for a myriad of intents and outcomes. In their May discussion paper, Technology for Good, McKinsey Global Institute explored the technology categories that have significant potential to improve areas of well-being across six areas of focus: job security, material living standards, education, health, equal opportunities and environmental sustainability – and the leaders weren’t as intuitive as one might assume. The technologies with the highest impact were Data and AI, Connectivity and Platforms and Robotics. IoT, Augmented Reality, Digital Fabrication (ie. 3d printing), New Materials and Biotech and CleanTech also had significant potential, but were not the leading categories.

Tech for Good

Some of our own portfolio companies are building technologies that have tremendous power for good. Forever Oceans, an investment in the Greenspring Early Stage I portfolio, is an operator of autonomous, sustainable aquafarms with a commitment to protecting our planet and preserving our oceans. Stash, an investment in the Greenspring Opportunities V and Greenspring Global Partners IX portfolios, and MoneyLion, an investment in the Greenspring Opportunities IV and Greenspring Global Partners VIII portfolios, are digital financial services platforms that empower consumers to take control of their personal finances by saving money, investing for the future and learning smarter financial habits, creating greater access to financial opportunity in the process. NGM, a Greenspring Opportunities V and Greenspring Global Partners IX portfolio company, is a clinical-stage biopharmaceutical company developing novel therapeutics to reshape the treatment of underlying cardio-metabolic, liver, oncologic and ophthalmic diseases. NGM’s drug candidates address some of the largest unmet medical needs globally, targeting therapeutic areas that represent leading causes of mortality and cause significant burdens for both patients and healthcare systems. Recycle Track Systems (“RTS”), a Greenspring Opportunities V portfolio company, provides technology-enabled waste collection services for commercial entities. Without owning a single garbage truck, RTS operates as an asset-light waste collection provider, outfitting a network of local, independent waste haulers with its proprietary routing technology to dispose of garbage, recyclables, compost, e-waste and reusable materials. We have countless other portfolio companies and indirect investments that are benefitting society in less obvious ways, for example through mobile payments that enable financial access, or online marketplaces that lower the cost of goods and services, or digital platforms that allow remote work, skill building and employment matching.


In short, technology is as ubiquitous as the millions of people who design and use it, and as inspirational and flawed. The nature of innovation is that it is hard to predict; we don’t know what the next big thing will be or how it might disrupt our current framework. It will take years of questioning, debating and challenging the status quo to be revealed, and black-and-white labels like “good” technology or “bad” technology can be an impediment to objectively deciphering a complex world and creating and adjusting ways to improve it. While there are certainly costs associated with innovation and technology, overall, we believe the good outweighs the bad.

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

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