It's tough to say whether the private market for tech companies is in bubble territory, but lofty late-stage funding in Silicon Valley could benefit from public market discipline, the managing director at Lerer Hippeau Ventures said Thursday.
When it comes to late-stage funding rounds, it's hard to know whether a company like transportation network Uber is worth $25 billion or $45 billion, Ben Lerer argued, when investors don't have the public markets to regulate the pricing.
Redpoint Ventures partner Geoff Yang was more definitive—saying he believes the late-stage private market had entered bubble territory.
"There's a lot of money on the West Coast in particular going into these late stage businesses," Lerer told CNBC's "Squawk Box " in an interview. "Uber is an amazing company. These businesses that are raising in the billions of dollars of valuations are amazing businesses, but how amazing, I don't know?"
Lerer Hippeau focuses on early-stage funding in the New York City area. The firm's investments include media website Buzzfeed, 3-D printer manufacturer Makerbot Industries, and eyeglasses Internet retailer Warby Parker.
"When the market's hot, the pre-money valuation on the deals we do might be $6 million versus $5 million, so there's smaller movement in the market that we're investing in," Lerer said.
Yang told CNBC private market multiples for late-stage tech companies were roughly two times those in public markets.
The disparity is more pronounced in the enterprise software space than in the market for consumer-oriented products, he added.
"That is very atypical. There usually is a positive arbitrage between the private market and the public market," the Redpoint Ventures partner said. "Right now I think the private market is more expensive than the public market."
Redpoint is a $3 billion fund for early-stage growth companies and focuses on Internet and broadband start-ups.
While most of the companies will see their valuations increase after going public, said Yang, there is no guarantee current valuations will hold post-IPO.
"Trees don't grow to the sky, right? I think there's got to be some revaluing," he said.