Despite the cash piling up in Silicon Valley, some start-ups might be better off selling out next year, according to the CEO of Adobe.
"A lot ...will depend on valuations, and the way valuations go in the private market," Shantanu Narayen, Adobe's president and CEO, said on CNBC's "Squawk Alley" on Friday.
"There's certainly some frothiness there. And there a number of companies that have been created that are not stand-alone companies, and so I think a number of them will look to acquisition as an exit strategy."
Adobe is a major player in the software industry — the industry that's gotten the most dollars from venture capitalists for 28 straight quarters, according to the third-quarter MoneyTree report by PricewaterhouseCoopers and Thomson Reuters.
Though funding has slowed down, October marked the 11th straight quarter of more than $10 billion in venture capital invested in a single quarter, the report said.