6 - Venture Capital and Unicorns

Summary

In recent years a series of new companies have been launched onto the stock exchange at extraordinary valuations. This chapter investigates how shares in such companies come to be valued so highly, paying particular attention to the role of venture capitalists in constructing the value of unicorns and similar companies. In doing so it provides the first of the three case studies that apply this book’s arguments on the construction of financial value to contemporary financial assets. It shows, in particular, how integral a focus on building asset circles has been to the process of constructing the value of the companies invested in by venture capitalists and thus how we need to extend established explanations of venture capital and company valuation to encompass this factor.