Bringing ownership in: a conjunctural approach to venture capital valuations

Abstract High startup valuations are commonly perceived as expressions of venture capitalists’ (VCs) power. This study complicates this view and argues that the valuation process is a struggle for ownership, deepening inequalities within the venture capital sector. Drawing on interviews with 19 early-stage VCs in London, I show that VC funds’ ability to obtain ownership stakes has changed in the low interest, expansive monetary policy environment of the 2010s. Late-stage VC funds moved into early-stage investing, increasing competition and upsetting previous alignments. Valuation practices centred on obtaining ownership and led to an antagonistic relationship between early and late-stage VCs. Following this, only a small group of elite funds delivered outsized returns while most funds failed to deliver promised returns. By foregrounding material limitations and conflict in the making of valuations, this study suggests that the business model of many VC funds became increasingly embattled during the 2010s tech boom.