EDIT: Scroll below for a great answer by /u/mikedash on VOC and what was the basis for its wealth /edit

It's not the complete answer but you should look this thread from 2 years ago when this many times reposted info appeared here for evaluation. There is a interesting discussion below about the origin of 7.4 trillion number which you will find interesting.

In particular user /u/GnomeyGustav made the following post:

though to be fair the MF article lists 5 generic sources for his adjusted graph

Yeah, I don't know. I hesitate to call those citations or sources. Are they private conversations with people?

Actually, here's something interesting! Wikipedia does say that the VOC may have been worth as much as 7 trillion dollars at it's height. Wikipedia's source for this claim is an article in The Atlantic, whose source for their seven trillion dollar claim is this article in Bloomberg. In this article, the only monetary value mentioned is that a paper share of the Dutch East India Company is valued by an auctioneer at $764,000. So is the historical value of the company being determined by auction prices of its shares as historical artifacts? This whole thing is extraordinarily ridiculous!

EDIT: The seven trillion dollar valuation was removed from the Wikipedia article after discussions with editors. They agree that Lafrench simply took the auctioneer's estimate and multiplied it by 10,000,000 (although I certainly can't find this number for oustanding shares in 1637), which was a very silly thing to do.

But as far as I can tell, Planes's article is still the first source to use the $7 trillion valuation. The Yahoo finance article came out a couple of months later and the Atlantic's article came out this month.

here's a 2013 article on fool

I can see how the panic as the tulip mania bubble was bursting would inflate the share price of the VOC. But I still don't see a source for those numbers. Since that came out after the Planes article and is from the same website, I'd have to assume that the Planes article is the source for that figure unless the 2013 article has some other citation.

so the index is wages not prices.

I guess so. But that's a very strange way to value a historical company, isn't it? A basket of goods is a basket of goods, but wages are connected to the basic structure of the economy. Just because the VOC was making a lot of money compared to the average person in 1637 doesn't necessarily mean the value of their assets is that extraordinarily high.

but taking the 7 trillion, for the math to work 1 guilder =95k dollars if i did my math right.

Yeah, that's what I got. I don't see how that could be possible.

Basically, If i am reading it right, the 7 trillion valuation is a number just floating around and can't be properly sourced from where. The value of the company was 78 million guilder in 1637

u/terminus-trantor has given a very useful summary of the state of play regarding the valuation of the VOC. I can touch on the second part of your question, which asks how the Company became so valuable.

The VOC's major asset in the C17th was its control of large parts of the European spice trade, won in large part as a result of a series of military victories over local rulers, the Portuguese, and the English East India Company. By controlling many of the islands where the most important spices grew, the Company was able to fix the prices that it paid at artificially low levels, and dictate the quantities that were shipped to Europe. In consequence its profits became astronomic.

The principal spices bought and sold in the East Indies were pepper, cloves and nutmeg. Mace (which is nutmeg’s shell) and cinnamon were also in demand, and the VOC often shipped small quantities of still more exotic goods – birds’ nests and civet, indigo and tea.

Pepper was the VOC’s main commodity. It was grown in India and in Sumatra, where the trade was still in the hands of powerful Muslim princes such as the Sultan of Aceh, and was available in greater bulk than all the other spices put together. The spice sold for a relatively modest 18 guilders per 100 ponds. Even so, demand was so great that by the 1620s Europe consumed some 80 percent of the world’s total pepper harvest. The Dutch imported half of that – almost four million ponds a year – filling their holds with case after case of the spice, and pouring it loose into the gaps between the freshly-stowed cargo so as to carry as much pepper home as possible.

Cloves were much scarcer and still more greatly prized. The spice (which is the dried flower bud of the clove tree) had been known in Europe since the Middle Ages, and demand for it was always high. The men of Magellan's expedition, during their circumnavigation of the world, had brought a shipload back to Europe and sold it at a profit of some 2,500 percent; even in the 1620s, the price could rise tenfold between the Moluccas and Malacca, and by as much again by the time that it reached Europe, where a single sack of cloves was worth at least 180 guilders.

By 1605 the Dutch had captured Ambon, Tidore and Ternate – three of the most important spice islands, which between them produced almost all the world’s supply of cloves. After 1621, they also controlled the world's supply of nutmeg, the most valuable of all the spices, which grew only in the volcanic soil of the inaccessible Banda Islands, 500 miles to the east of Java, and was thus fantastically scarce. Nutmeg was regarded as a potent medicine, proof even against the plague, and still more effective as a treatment for minor ailments from colds to diarrhoea. The limited supplies invariably fetched fantastic prices; a single cargo could make a merchant rich for life.

The Dutch called nutmegs muskaatnooten, and graded them according to their value. The best of all were vette noten, fat nuts, though unripe nutmegs (rompen) could sell for almost as much. Vermijterde – worm-ridden – nutmegs were still worth something, and even the red shell-chips that covered the freshly-harvested fruit were carefully preserved to be sold as mace. Because they were so hard to obtain, cloves and nutmeg were shipped west in much smaller quantities than pepper, though with nutmeg fetching 1,500 guilders a sack these two spices still accounted for a fifth of all trade with the east between them.

What the Dutch termed "the rich trades" thus proved lucrative indeed, and with European prices fixed at substantial levels and the continuing success of the VOC apparently assured, Dutch traders in the east became increasingly confident and aggressive. The English trader Henry Middleton, who ran across the merchants of the VOC in Bantam, penned a vigorous protest at the escalating arrogance of ‘this frothy nation’. He was far from alone in finding the Hollanders’ demeanour hard to stomach.

At home in the United Provinces of the Netherlands, the VOC indulged in similar high-handedness. Although its victories had been won with guns supplied by the Dutch government, and though the Company’s monopoly remained in the gift of the States-General (the Dutch parliament), its directors did not hesitate to assert their independence when the opportunity arose. ‘The places and the strongholds captured,’ they tartly told the States, ‘should not be regarded as national conquests but as the property of private merchants, who were entitled to sell those places to whomsoever they wished, even if it was to the King of Spain.’

The leaders of the United Provinces, who depended on the VOC to prosecute their war with Portugal and Spain in eastern waters, had no choice but to tolerate the Gentlemen’s presumption. The same was not true of the English East India Company, whose fragile grip on the spice trade – painfully built up over several decades – was greatly weakened by Dutch aggression. ‘These butterboxes,’ another English merchant complained in 1618, ‘are groanne so insolent that yf they be suffered but a whit longer, they will make a claime to the whole Indies, so that no man shall trade but themselves or by their leave.’ He was right. By the middle of the 1620s, the Indies trade, which had been so fragmented and unprofitable only two decades earlier, had evolved into a well-organised Dutch monopoly. The six chambers of the VOC sat at the centre of a web of trade yielding unprecedented profits.

Source

Mike Dash, Batavia's Graveyard (2002)

Knowing the insane corruption and out-and-out stealing that SO much of the VOC did, their "worth" should be taken very lightly. The other posts here are good on that.

There were just a lot of factors that kinda were "right place, right time" that set up their success as well as their downfall. You have the 80 years war, the split from the H.R.E., the wars with Spain and Portugal, colonization efforts of much of the "uncivilized" world. The VOC's efforts were helped by going after SE Asia, rather than the Americas (though they did have several colonies in North America and several islands in the Caribbean, there would be a "trade" with England at one point that the VOC/Dutch would give up their American holdings in exchange for England stopping their harassment of trade in the Spice Islands).

So when the Netherlands split away from the Holy Roman Empire, and from Spain, you had a ton of merchants all vying for use of these spice routes and all competing with each other. What would FOUND the VOC is a combination of rederijj (essentially venture capitalism) and combining all of these competing merchants into the same company. Because profit margins were getting slimmer as more and more merchants and merchant companies tried to cash in on the VERY lucrative spice market, a group of these merchants all came together in 1602 and made the VOC. Each of the governors (17 in all) for the VOC got an area of control in the corporation (geographically usually), and the VOC was also given a VERY powerful monopoly of East Indian trade in the Netherlands. So if you wanted to sell spices in the Netherlands, you HAD to be a part of the VOC. Think the US Government saying if you wanted a cell phone, it HAD to be from Apple (not the greatest example, but I just finished 2 massive papers last week and my brain is not happy I'm delving back into history this soon but I LOOOVE this topic, so much)

It's important to note that the VOC wasn't just "a company", it DOMINATED the Netherlands and was a MASSIVE factor in the reason the Dutch had an economic "golden age" so soon after their split away from Spain/HRE. The VOC had their own headquarters in every province and a massive one in Amsterdam. They had their own army, their own navy, their own shipyards, and their own currency. They would set up networks of ships to have a near constant stream of supply coming into their ports (Amsterdam, Zeeland, and Holland were the big ones, for all of Europe not just the Dutch).

On top of this massive monopoly that they commanded, most of the leaders of the VOC were complete dicks, and in many cases straight up advocated for the genocide of the native populations of some of the Spice Island to enforce and maintain their superiority in the SE Asian islands. The natives wanted to trade with anyone who would give them the supplies they needed (they would grow spices as a trade crop, and then trade with other islands/India for things they needed, like cloth or food). They had no idea what the concept of a monopoly was. So when the Dutch came in and had them sign all of these things saying "WE HAVE A MONOPOLY ON YOUR CROPS!", it was basically "lol k, but we need other things, so not really." Instead of the VOC trying to work with them, they usually just killed anyone who violated their monopolies. In one case, an entire island (Banda)

So they had a LOT of assests leading into this company, and because of rederijj, everyone involved had a piece of the company (in some way or another). But everyone also wanted more money too. Because they were bringing in such massive quantities of all of these spices, the prices went down (supply and demand). HOWEVER, because of lower prices, the lower classes were able to afford pepper and nutmeg much easier. There are some truly gross recipes that call for CUPS of pepper in various meat pies. And all of these spices just kept coming in, so there would be warehouses just stuffed full of surplus spices. Pepper, Nutmeg, Allspice (which comes from growing nutmeg), cloves, they had an impressive market for it all. At this same time, you have the emergence of the sugar markets in the West Indies, which is also having a major impact on dietary/caloric intake throughout all of Europe. So the boom of the spice market was caused, and also helped other commodities flourish. They were all very much interconnected in that regard.

Sources:

Boxer, C.R.. The Dutch Seaborne Empire 1600-1800. New York: Alfred A Knoff, Inc., 1970.

Crump, Thomas. “The Dutch East Indies Company – The First 100 Years.” Lecture, Gresham College, UK, 01/03/2006. http://www.gresham.ac.uk/lectures-and-events/the-dutch-east-indies-company-the-first-100-years.

Parthesius, Robert. Dutch Ships in Tropical Waters. Amsterdam: Amsterdam University Press, 2010.

Prak, Maarten. The Dutch Republic in the Seventeenth Century. Cambridge: Cambridge University Press. 2005.

Price, J.L. The Dutch Republic in the Seventeenth Century. New York: NY. St. Martin’s Press.

Tracy, J.D. (2008), The Founding of the Dutch Republic: War, Finance, and Politics in Holland 1572–1588, Oxford University Press, 2008.

Do any modern families or businesses benefit from the wealth amassed by VOC? Is it possible for such wealth to be passed along through so many generations?