Another Tech Bubble Might Be Getting Ready to Pop

Venture capitalists are pouring money into social networking startups
By John Johnson,  Newser Staff
Posted Dec 4, 2010 9:30 AM CST
A file photo of Groupon founder Andrew Mason, who has reportedly rejected a $6 billion offer from Google.   (AP Photo/M. Spencer Green)

(Newser) – The New York Times makes the rounds of venture capitalists and entrepreneurs and hears worry that another dangerous bubble is forming with tech startups. Because relatively young companies such as Groupon, Twitter, and Zynga have billion-dollar values, nobody wants to miss out on the next big thing—hence the flood of money into anything remotely connected to social networking. (Which explains why Groupon is able to turn up its nose at Google's offer of $6 billion.)

“I am seeing many more unnatural acts from investors happening,” blogs one prominent venture capitalist. "I have never seen phases like this end nicely.” Another sees a different kind of trend fueling the money: “Investing in technology has become fashionable,” he tells the Times. “It used to be that angel investing was the province of wealthy men. Now its become the province of everyone."

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