Partying as if it's 1999; Fabulous timesin Silicon Valley.

• Author: Streitfeld, David
• Position: Business

Byline: David Streitfeld

PALO ALTO, Calif. -- These are fabulous times in Silicon Valley.

Mere youths, who in another era would just be graduating from college or perhaps wondering what to make of their lives, are turning down deals that would make them and their great-grandchildren wealthy beyond imagining. They are confident that even better deals await.

"Man, it feels more and more like 1999 every day,'' tweeted Bill Gurley, one of the valley's leading venture capitalists. "Risk is being discounted tremendously.''

That was in May, shortly after his firm, Benchmark, led a $13.5 million investment in Snapchat, the disappearing-photo site that has millions of adolescent users, but no revenue. Snapchat, all of two years old, just turned down a multibillion-dollar deal from Facebook and, perhaps, an even bigger deal from Google. On paper, that would mean a fortyfold return on Benchmark's investment in less than a year.

Benchmark is the venture capital darling of the moment, a backer not only of Snapchat but the photo-sharing app Instagram (sold for $1 billion to Facebook), the ride-sharing service Uber (valued at $3.5 billion) and Twitter ($22 billion), among many others. Ten of its companies have gone public in the last two years, with another half-dozen on the way. Benchmark seems to have a golden touch.

That is generating a huge amount of attention and an undercurrent of concern. In Silicon Valley, it may not be 1999, but that fateful year -- a moment when no one thought there was any risk to the wildest idea -- can be seen on the horizon, drifting closer.

No one here would really mind another 1999, of course. As a legendary Silicon Valley bumper sticker has it, "Please God, just one more bubble.'' But booms are inevitably followed by busts.

"All business activity is driven by either fear or greed, and in Silicon Valley we're in a cycle where greed may be on the rise,'' said Josh Green, a venture capitalist who is chairman of the National Venture Capital Association.

For Benchmark, that means walking a narrow line between hyping the future -- second nature to all in Silicon Valley -- and overhyping it.

Opinions differ here about exactly what stage of exuberance the valley is in. "Everyone feels like the valley has been in a boom cycle for quite some time,'' said Jeremy Stoppelman, the chief executive of Yelp. "That makes people nervous.''

John Backus, a founding partner with New Atlantic Ventures, says he believes it is more like 1996...