Metaphors used by venture capitalists: Darwinism, architecture and myth

Abstract

In this paper we develop a catalog of metaphor families that Silicon Valley venture capitalists use in their public communications. In establishing this preliminary catalog we aim to provide additional insight into the venture capitalist perspective and also lay the foundation for the development of a grounded cultural model of Silicon Valley venture capitalists. To develop this catalog we surveyed on average 30 venture capitalists each quarter from Q1 2004 to Q1 2009. We analyzed these 21 qualitative datasets, coding and categorizing more than 10,000 words of direct venture capitalists' communications. We found that VC communications fall into 14 dominant metaphor families (e.g. Darwinism, physics, religion, etc.). We contribute to the literature on venture capital by establishing a catalog of predominant VC metaphor families as an initial step toward a grounded cultural model of venture capital. This catalog may also provide further context for related studies on VC decision-making and an additional tool for stakeholders of the venture capital industry in better interpreting VC communications.

Keywords:

• venture capital
• metaphor
• decision-making
• cultural model
• confidence

Notes

1. The US National Venture Capital Association, Dow Jones, and other sources provide their calculation of venture capital fundraising, investments, IPOs and M&As of venture-backed firms and related metrics of the venture industry in total on a quarterly basis.

2. The Silicon Valley venture capitalist confidence index provides a quarterly survey of venture capitalists' confidence in the future high-growth entrepreneurial environment (Cannice 2004–09). The survey provides a quantitative average of the respondents' confidence (5 high to 1 low) along with qualitative analysis.

3. See current and historical commentary from the National Venture Capital Association at www.nvca.org.

4. See Holland and Quinn (1987) for a explanation of cultural models.

5. See Ackroyd (1996) for an evaluation of leading qualitative analysis methods.

6. See Moesel, Fiet, and Busenitz (2001) for an application of metaphor development in the venture capital context.