Top Silicon Valley figures back new Long-Term Stock Exchange that rewards shares with more voting power the longer investors own them
Tech luminaries back new exchange that rewards shares with more voting power the longer investors own them — Silicon Valley's high-tech denizens complain … Tweets: @reformedbroker and @greg_ip . Thanks: @sarablask Tweets: Downtown Josh Brown / @reformedbroker : Can a new stock exchange that protects long-term shareholders (and management) from short-termism take flight? http://www.wsj.com/... Greg Ip / @greg_ip : Silicon Valley's answer to short-termism: a stock exchange to reward long-termism, by @aosipovich & @dkberman http://www.wsj.com/... http://twitter.com/... Thanks: @sarablask
Context & Ripple Effects
This 2017 Wall Street Journal report is the founding moment of a story that took years to play out: Eric Ries' pitch for an exchange where voting power accrues with share tenure, backed by Silicon Valley figures frustrated with quarterly earnings pressure. The idea survived contact with reality — the SEC approved the LTSE in 2019, and it opened for trading in 2020, nine years after Ries first proposed it.
The follow-through validates the thesis in this piece: Founders Fund, a16z, Obvious Ventures, and Initialized Capital funded the exchange's Series B, James Walton put in $100M by 2022, and Twilio and Asana became its first dual listers off the NYSE.
First-order effects
- Founders and long-horizon backers of companies listing on the LTSE get a structure where their votes strengthen over time, directly diluting the influence of short-term traders on corporate decisions.
- Ries positions the exchange as a channel to ESG investors, giving listed companies a governance story aimed at that buyer base from day one.
Second-order effects
- NYSE and Nasdaq now face a rival whose differentiation is listing rules rather than fees or liquidity, forcing the incumbents to defend why their governance defaults serve issuers.
- Venture firms like Founders Fund and a16z gain a listing venue aligned with their multi-year holding patterns, potentially steering portfolio companies toward LTSE at IPO time.
Third-order effects
- If tenure-weighted voting spreads, exchange competition shifts structurally from trading economics to rule-setting as the product, letting new entrants win listings on governance design instead of market share.
- A successful LTSE would give regulators a live test case for whether shareholder-tenure structures curb short-termism — evidence that could shape future listing-rule debates.
The trend: Stock exchanges are beginning to compete on governance rules rather than liquidity alone, with Silicon Valley capital building venues that encode long-termism into listing terms.