Are breakout unlisted startups hitting bubble territory?
The head of the Securities and Exchange Commission, the United State's market watchdog, has raised concerns about high valuations being placed on unlisted tech companies.
Mary Jo White, the chair of the Securities and Exchange Commission described some of the valuations as "eye-popping" as she warned that there is a danger of the market overheating.
She added that the money being pumped into these so-called unicorns - start-ups with market valuations in excess of $1bn - could have serious consequences for the investors who are backing them.
At a speaking engagement at the Stanford Law School, she said, "Being a private company obviously does not mean that you can disregard the interests of investors. Indeed, being a private company comes with serious obligations to investors and the markets."
The Financial Times described the comments as "unusually forthright."
"The concern is whether the prestige associated with reaching a sky-high valuation fast drives companies to try to appear more valuable than they actually are.
"Whether the source of the obligation is the federal securities laws or the fiduciary duty that is owed to shareholders, the resulting candour and fair dealing should be fundamentally the same," she continued.
The amount of money being invested in start-ups has led to a slowing of the speed at which companies go public, the average duration of this process has doubled since 1999.
Unlisted companies with sky-high market valuations include Uber, which is valued at $62.5bn and the house sharing company Airbnb and mobile messaging app Snapchat, who also have market valuations in excess of $10bn.
Staying public for longer generally requires the creation of increasingly complex structures as more shares are issued. This makes it harder to value these companies.