[nostrademons]

Secrecy actually makes it more likely that terms reflect correct valuations, as long as each of the firms have independent decision making power and see a wide variety of deals. See eg. The Wisdom of Crowds, which found that a group makes better decisions than an individual iff each individual relies on their own data and comes to their own decision. If one individual unduly influences others' decision-making (eg. the "YC stamp of approval" which inflates valuations at demo day), then you get information cascades that can lead to exaggerated boom/bust cycles. If the parties left in the dark lack decision-making ability and independent information channels (eg. Theranos), you get information asymmetry and a market for lemons. But a market where each firm sees a continuous stream of deals and independently decides on each one without any regard for its competitors is pretty much the definition of a competitive market, which implies prices should converge toward accuracy very quickly. I'd argue that that's much closer to the situation now than it was in 2000.

[webmasterraj]

This is a really good point, and explains why later-stage investing seems so wacky vs early and mid stage. The decisions to invest in later-stage startups, eg Uber, seem more influenced by other investors and the fear of missing out, while early to mid stage might steer closer to the independent decision making model.