Valuations for start-ups appear stretched as Silicon Valley takes on too much risk, venture capitalist Randy Komisar told CNBC on Friday.
"We're getting ahead on valuations," Komisar, a partner with venture capital firm Kleiner Perkins Caufield & Byers, said on "Squawk Alley."
To Komisar, a former CEO of LucasArts Entertainment and founding director of TiVo, there are a few reasons behind this growing concern. First, "there's too much capital and there's very few places to invest it," he said. Second, risk is not being priced properly and so venture capitalists are taking high-risk, high-reward bets, he said.
"The mega winners, while they have low probability, have had such great returns that they tend to be the best bets that the market's made in Silicon Valley certainly in the last decade," he said. "So consequently, that sort of investing—very, very high probability of failure, but very, very extraordinary returns on the winners—drives people to take risks differently."
Looking forward, Komisar said accountability will come into the marketplace as people reconsider they will raise capital to sustain these big bets.