• TechCrunch, Tuesday, May 22, 2007 10:32 AM

Silicon Valley is once again starting to drink its own Kool-aid. Barely two years ago, before the VC firms moved in, when YouTube was getting its wings and the biggest success story was Yahoo's acquisition of Flickr, it was a friendly place. No one had marketing departments or PR firms, and everyone was there because they loved what they did.

But all that has changed. The private money started flowing in, and the PR firms and that weighty corporate ambience are here. Companies have to actively dodge venture capitalists to avoid raising a big round of financing. The press side of things has changed, too: more fluff and fewer meaningful conversations with startup executives.

Guess what? Silicon Valley is simply undergoing the natural transition of a thriving industry, becoming less open and more corporate. More money means the stakes are higher for everyone. Some might say the greater worry (in a global economic sense) is the glut of private equity out there. At least this time, if VCs are unscrupulously funding startups, it won't affect the stock market--though it might affect Silicon Valley.

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