Gold rush is back in Silicon Valley

Lots of dealmaking these days involving deep-pocket investors and countless startups. "The momentum," writes WSJ's Monica Langley, "is driving a wave of deal envy and trash talking - complete with power plays, personal feuds and turf wars among Wall Street bankers, billionaire speculators and venture-capital veterans." First-quarter venture funding jumped 76 percent over the previous year. Demand for tech company private shares is also surging.

To some investors, the mood is reminiscent of 1995, when the initial public offering of Netscape set off the dot-com craze, leading to a technology bubble. That bubble popped in 2000, littering the tech field with failed companies and red ink. Others believe today's boom is more sustainable. "There are a bunch of rich people and firms subsidizing tech entrepreneurs, but this time the entrepreneurs are better," says David Lee, managing partner of SV Angel, which provides seed money for tech start-ups. "These companies have millions of engaged users or actual profits. It's not just sloppy money coming to the table."

One beneficiary of all this action could be the state of California. Recession-related bad times in the Silicon Valley led to a big drop in tax revenue for the state, one reason the budget deficit has been so high. More deals might translate into more taxes.