the source of initial (or at least early-stage) funding for many companies, especially during the DotCom boom.
Sometimes driven by the rush to push pseudo-companies into the hands of Wall St via IPO to cash out before the music stops.
Jun'2003: Joel Spolsky on Fixing Venture Capital - 2003-06-04-JoelVentureCapital
Jul'2004: Brad Feld's standard calculations http://www.feld.com/blog/archives/2004/07/venture_capital.html
Aug'2007: spreadsheet on effects of various deal terms (liquidation preferences, etc.)
Jul'2010: how they calculate valuation.
scary horror story: Charles H Ferguson's High-Stakes No-Prisoners (1999) ISBN:0812931432 (also relates to Microsoft, since Ferguson's Vermeer created MsFrontPage, which led Microsoft to buy them)