As Tech Deals Boom, Talk Turns to Bubbles

I think this is a function of the lack of another sane place to put your money. Right now with interest rates at 0% it's hard to say the economy is going anywhere on sound footing. Would you put your money in treasuries? Stocks? Cash? Past a certain point these things seem more risky than they're worth relative to their potential reward. Investing in another Facebook or whatever at an early stage by comparison seems to be worth a lot more and you have more control over what happens than say owning shares in Citi.<p>If there is a bubble it's not much to worry about since the investments are fueled by savings and not debt. Debt fueled bubbles make losses so much worse for everyone. The worst case is that some investors get wiped out (or at least what they invested was lost) and we all move on having a few good laughs about how crazy we were back then (how many Twitter services do we need when no one can decide if we even need Twitter).<p>The number of bootstrapped companies out there suggests that at least some people feel like raising money isn't worth it even in this climate so I don't think this time period is all bad for tech.

It smells like a bubble, but this time around, there are fewer IPOs and the big buys are acquiring for talent too. With the advent of facebook v google talent grabbing, it makes sense to buy startups with crazy smart people early.<p>This article also needs to take in account of the super angels and the new face of investing these days. Sure, a lot of deals are happening, but a lot of the early funding is coming from many sources and the angels are spreading thin. Come on, NYTimes, did you forget Angelgate?

Question for those of you working inside of big companies:<p>I am sure many of you are getting recruited to join startups. What's the general sentiment in this demographic - are you guys torn between feeling like you should join a hot opportunity now, but in some ways afraid that you might give up that 6-figure salary only to get hit by a burst bubble in mid-2011 and would have to crawl back to a more stable corporate gig?

The higher numbers re: valuations I've seen and heard are just under $10M (recent YC startup). Potentially rumors of $20M (Instagram, but was apparently untrue). Not sure which startups are seeing the $30-50M range that Fred Wilson mentions. Clearly, he sees a lot of deal flow, but you'd assume the major tech blogs would cover these startups.

We're in a cheap money environment and tech companies are sitting on piles of cash they're genetically predisposed not to distribute back to shareholders. There's only one place for it to go: acquisitions. Meaning we see more deals at higher valuations. It doesn't reflect anything fundamental.

$30-50M? Seriously, I will quit tomorrow and get a five person team of proven entrepreneurs also put together tomorrow, if I can get a $30M valuation with a VC coming in for 20% of that.

Even if there is a bubble, what does it mean for the app economy? People making money on facebook, twitter, and the App Store might see sales dip if there's a bust, but people aren't going to use free services less. (Although App Store sales won't dip because the app store was built during the last recession).<p>edit: perhaps this seems naive, but please keep in mind I'm only asking about this one small segment.

Seems pretty bubble like to me.