Venture capital firms valuation in bull and bear markets: Evidence from Sweden
Journal article, 2020

This study uses an experimentally designed case study to investigate Swedish venture capital firms’ valuation practices in two different economic contexts—the economic boom (bull market) of 1999 and the downturn (bear market) of 2002. Studying these periods enables an investigation of changes in valuations, and implicitly, required rate of return, rules of thumb, and valuation models used. Contrary to expectations, in times of heightened stringency and economic downturn, venture capital firms employed fewer valuation models than during boom times. This study thus enriches the knowledge of venture capitalists’ valuation practices, in general, and the effect of market conditions on them. Furthermore, the results can also aid researchers developing more relevant theories of valuation, valuation models, and valuation practices.

dot-com bubble

economic boom

economic downturn


bull market

bear market

venture capital

investor behaviour

market conditions


Anders Isaksson

Chalmers, Technology Management and Economics, Innovation and R&D Management

Öystein Fredriksen

Linköping University

International Journal of Entrepreneurship and Innovation Management

1368-275X (ISSN) 1741-5098 (eISSN)

Vol. 24 2/3 97-115

Driving Forces

Innovation and entrepreneurship

Subject Categories

Business Administration

Human Geography



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1/5/2021 8