The thing that troubles me most about this article is that I'm not in the valley at the moment. I'm not reaping multi-million dollar bonuses for not quitting, I'm not getting money for my startup with no due diligence...

To me this isn't a warning, it's an opportunity - now is the time, we are almost at the peak of the bubble, get in now. (Get in on the entrepreneurial side where values are high; get out on the VC side where values are low - but I'm on the former side))

There is a lot of money floating around in the US economy right now courtesy of Quantitative Easing. Yields on most asset classes (especially safe ones) are low, and the stock market is lackluster... so it wouldn't surprise me to hear a lot of money is flowing into the entrepreneurial side of the economy - isn't that about the best possible outcome?

I don't see this bubble bursting as hard. Most companies involved (Google, at least) have solid incomes, and are not running on hopes, dreams and borrowed money. VCs might find they paid too much, and Google might wind up with a slightly too expensive (but quite possibly rationally priced) employee base.

But a VC that paid too much gets a haircut, the fund gives bad returns... so what? New funds spring up. It is not that bad.