We use geometric invariant theory and the language of quivers to study compactifications of moduli spaces of linear dynamical systems. A general approach to this problem is presented and applied to two well known cases: We show how both Lomadze’s and Helmke’s compactification arises naturally as a geometric invariant theory quotient. Both moduli spaces are proven to be smooth projective manifolds. Furthermore, a description of Lomadze’s compactification as a Quot scheme is given, whereas Helmke’s compactification is shown to be an algebraic Grassmann bundle over a Quot scheme. This gives an algebro-geometric description of both compactifications. As an application, we determine the cohomology ring of Helmke’s compactification and prove that the two compactifications are not isomorphic when the number of outputs is positive.