We examine how the relative bargaining power - determined either by market conditions or by prior experience - of privately informed venture capitalists and entrepreneurs affects venture capital contracting. Our results demonstrate that shifts in bargaining power profoundly influence both the terms of contracts and investment in venture-backed projects. As witnessed in the recent past, when the bargaining advantage lies with entrepreneurs, projects may not be screened, and venture capitalists may acquiesce to excessively large initial investments but subsequently terminate projects. The payoff sensitivity of venture capitalists' financing contracts increases as their bargaining position improves. An improved bargaining position encourages project screening. It also attenuates venture capitalists' incentives to overinvest and the need to terminate projects subsequent to the initial investment.