That was the question on the table at a breakfast roundtable packed with venture capitalists on day two of Fortune’s Brainstorm Tech conference in Aspen, Colo. Stacey Bishop of Scale Venture Partners acknowledged that the “unicorns”—privately owned startups valued at $1 billion or more—have values that are roughly double those of comparable companies in the public markets. But the VCs uniformly rejected the notion that that indicated a bubble, similar to the one that inflated and popped in 1999-2000.
Bill Maris, president of Google Ventures, argued that many of the unicorns—he cited Uber and Slack, which Google Ventures has invested in—are “real businesses,” unlike many of the startups in 1999. His test for a “real business”: “If there is a recession—and there will be a recession at some point—will the companies survive without a future fund raise?”
Byron Deeter of Bessemer Venture Partners also pointed out the investors who are buying into these unicorn rounds aren’t “dumb money…they are extremely smart investors.”
But all participants agreed that if a recession comes, there still will be, in Deeter’s words, “many ugly stories to write about.”
Asked which sectors they were avoiding for investments, many of the VCs said that “on demand” services like Uber and Airbnb “seem fully priced.” (For their valuations, head over to Fortune‘s Unicorn List.)
Asked which sectors in which they saw opportunity, the VCs cited life sciences, the Internet of things, and artificial intelligence.
For more coverage of this year’s Fortune Brainstorm Tech conference, click here.