This　paper　analyzes　how　institutional　investor　attention　affects　firm　valuations　in　the　venture　capital　market.　Relying　on　research　reports　of　financial　institutions　in　China,　we　propose　a　direct　measure　of　abnormal　institutional　attention　to　industries　(AIA)　after　eliminating　industry　differences　and　heteroscedasticity.　We　find　that　firm　valuation　is　positively　associated　with　institutional　investor　attention.　Our　conclusion　continues　to　hold　after　controlling　for　selection　bias　and　validating　different　measures　of　AIA.　In　addition,　we　find　a　negative　relationship　between　AIA　and　the　performance　of　VC　investments　measured　by　the　likelihood　of　successful　exits.　Our　findings　support　the　notion　that　an　increase　in　venture　valuations　is　overpricing　caused　by　institutional　attention　rather　than　a　fundamental　premium.