Elder-Vass_5588-Anonymised Manuscript-18388-1-10-20210504.pdf (304.43 kB)
Assets need audiences: how venture capitalists boost valuations by recruiting investors to asset circles
journal contribution
posted on 2021-02-09, 10:00 authored by Dave Elder-VassNarratives and conventions have received considerable attention in recent discussions of the valuation of financial assets. Narratives and conventions, however, can only be effective to the extent that they attract and persuade audiences, and this paper makes the case for paying more attention to those audiences. In particular, it argues that financial assets can only be established as assets if there is a group of potential investors that has been persuaded to accept them as such: to take them seriously as potential investments. The paper coins the term asset circles to refer to such groups, and supports the argument with a discussion of venture capital and its role in the production of unicorns – private companies with extraordinary valuations. Venture capital firms may be thought of as value entrepreneurs, and much of the venture capital process is oriented to constructing both value narratives for the companies they invest in and asset circles prepared to accept those value narratives. Their aim in these processes is a profitable exit, in which the venture capital firm converts its investment back into cash at a considerable profit through either an acquisition or a flotation.
Funding
Independent Social Research Foundation through a Political Economy Research Fellowship.
History
School
- Social Sciences and Humanities
Department
- Social and Policy Studies
Published in
Finance and SocietyVolume
7Issue
1Pages
1-19Publisher
Finance and SocietyVersion
- VoR (Version of Record)
Rights holder
© The AuthorPublisher statement
This is an Open Access Article. It is published by Finance and Society under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence (CC BY-NC-ND 4.0). Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2020-09-08Publication date
2021-05-04Copyright date
2021ISSN
2059-5999Publisher version
Language
- en
Depositor
Dr Dave Elder-Vass. Deposit date: 23 September 2020Usage metrics
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