"The venture community has more sheep than wolves, and when there's a belief that there's only one direction - up - the sheep pile in," said Bob Ackerman, founder of Allegis Capital, who was not speaking about any specific firm or investment. "In the case of the social media space, a lot of the valuations were driven short-term more by hope than by reality."

Only half true.

LinkedIn, Yelp, and Google+ have valuations that are thriving.

It's Facebook, Zynga, and Groupon that the public markets are scratching their heads about.