With Silicon Valley playing host to several major acquisitions, and the tech sector addressing bubble questions, one prominent venture capitalist said companies are facing difficult questions from the "shocking" availability of late-stage capital.
Bill Gurley, a general partner at venture capital firm Benchmark—who sits on 10 boards including Uber, GrubHub, OpenTable and Zillow—said he finds it difficult to give advice to private companies looking to go public or sell themselves.
"It's difficult [to advise them] when the capital becomes this easy. And the late-stage capital availability has just been shocking to me for almost four years now," he said. "If your competitor is going to raise a bunch of money, then you have to make a decision, 'Am I going to get into that game or not?' Especially if there's a way that that money could be competed on the field, it's one of the more difficult decisions and difficult conversations you have."
Despite these considerations, Gurley said the tech sector trends are a natural extension of the overall market sentiment.
"If the public markets will take on riskier and riskier companies, then Silicon Valley is going to produce more of those for them," he said on CNBC's "Squawk Alley" at the Re/code Code Conference in Rancho Palo Verdes, California.
Gurley did, however, express approval of the reductions in valuation earlier this year. "I actually think it's healthy, and I think the odds that the IPO window is going to stay open longer is better if we just don't take it too far," he said.
The venture capitalist also turned to questions about the larger, more established tech companies. He downplayed the significance of the Google's recent announcements about its self-driving car (and the possible Uber partnership), saying these companies, such as Google and Amazon, "with their driverless cars and drones have done a good job distracting the media from the tougher questions that you guys ought to be asking them about."
—By CNBC's Everett Rosenfeld.
Disclosure: NBC News group is a minority stakeholder in Re/code and has a content sharing partnership with the technology news website.