I've previously been in the camp that there isn't a bubble. This seems like its a valuation of 1 or 2 hundred million for a company that hasn't launched yet. It's very hard to see how this deal could make sense in a traditional way.
Don't get me wrong I think this sounds like an excellent idea that could turn out to be an excellent company. It's just such a large amount of money to raise that it kind of raises the question of what game the VCs and/or founders are really playing.
It seems like at this point there might be a possibility of VCs planning on Facebook and Twitter going public and either being acquired at an inflated price with all that new capitalization or going public themselves in the wake.
I think movie flops are much more uncommon than failed companies though. Maybe this investment represents a very uncommon level of certainty in the company's success. It could also just be a bad investment, there is always a range.
It still isn't clear to me that if there was a sudden readjustment of these overvalued companies how many companies would really be effected and what it would mean for the sector as a whole. I don't think its defining the whole sector the way it did in 2000. It might mean bad things for VCs in general, but maybe this is the economy working VCs out of the system.