Still, by any metric many start-up valuations are lofty. Airbnb and Dropbox have been pegged at a valuation of $10 billion; Palantir at $9 billion; SpaceX at about $5 billion; Pinterest and Uber both around $4 billion.
But despite these valuations, several venture capitalists aren't worried, saying many of the start-ups are real businesses with real revenues.
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"The first rule of 'Fight Club' is you never talk about 'Fight Club.' Well, the first rule of bubbles is that, if everybody is talking about it, then it isn't a bubble. So we have these real companies with real revenues and profits. But it also can't be a bubble if we are all discussing it," said Ganesan.
One of the factors driving valuations higher is that venture capital companies are flush with cash, and often that can lead to a lot of money chasing a few good deals. But venture capitalists feel there are still plenty of places to commit capital. VCs invested $9.5 billion in the first quarter—the highest quarterly total in about 13 years—according to PriceWaterhouseCooper's MoneyTree Report.
And as you drill into the numbers, the software industry received the highest level of funding, rising nearly 40 percent to $4 billion. That was followed by biotech and information technology services.
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Still, even venture capitalists who dismiss bubble talk say certain sectors aren't looking like bargains.
"The bubble doesn't really matter that much, especially if you're doing early stage investing. So if we make an investment in an A round of a company today, which is typically the first institutional money round. That company may be going public seven, nine, 10 years from now so what the public markets are doing quite frankly has no impact on our decision," said Scott Kupor, partner and COO of Andreessen Horowitz, the Silicon Valley venture capital firm founded by Marc Andreessen and Ben Horowitz, which recently added $1.5 billion to his venture pool of funds.
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But Kupor admits there are some risks in this market, and if there would be a market correction, it would have fallout on IPOs getting ready to hit the market.
"A place where people get caught, I think, is where you do these late-stage investments—what people would call crossover mezzanine investments—a lot of valuations going to be based on what's happening in the public market. So if you do get a correction in the public markets that's where you can kind of see people getting a significant downdraft in valuation," Kupor added.
—By CNBC's Mark Berniker and Josh Lipton.