‘Maybe’ a tech bubble, but mostly noise: Y Combinator prez

Tech's 'New Establishment'

There may be a private technology bubble right now, but when looking out over the long term, it is really just noise, Y Combinator President Sam Altman said Tuesday.

"There are a lot of people who sort of try to speculate where in the cycle we are and what's going to happen next month, next year," he said in an interview with CNBC's "Power Lunch" from the Vanity Fair New Establishment Summit in San Francisco.

"At Y Combinator, though, we try to think the next decade, the decade after that. If you invest on that sort of a time frame, if you try to think about how awesome the world is going to be in 20 years, then everything here just looks like noise."

Talk of a bubble in Silicon Valley has been growing as the number of billion-dollar private companies, called "unicorns," expands.

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The second quarter of 2015 was the sixth-consecutive period of more than $10 billion of venture capital invested in a single quarter, according to the MoneyTree report, a collaboration between Thomson Reuters, Pricewaterhousecoopers and the National Venture Capital Association.

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Y Combinator invests in 250 companies a year that are in the "very, very early stage," Altman said. It provides $120,000 in seed money for a 7 percent stake in the company. Since 2005, Y Combinator has invested in over 800 startups, including Reddit and Airbnb.

"We look at every investment and say … 'does this company have potential to be huge?'"

Not all investments pan out, and concerns about companies can surface if they don't have profitability within grasp, he said.

"If a company can get to profitability, if they chose, on the cash they have in the bank, they we don't worry about them. If they are dependent on outside capital then the markets have a big effect on them."

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Altman also addressed the idea of investing in a CEO who headed two companies, like Twitter's new CEO Jack Dorsey, also CEO of Square.

"It worked for Steve Jobs, it works for Elon [Musk] so it's clearly possible. I'd be a little bit skeptical but yeah it's possible," he said. "I think at our stage we want [to be] really focused."

—CNBC's Anita Balakrishnan contributed to this report.