Bubble or no bubble?ColorScreen

The debate has become a favorite pastime within the Internet industry, as startup valuations soar and investors vie to buy shares of hot private companies in the secondary market.

On Wednesday evening, a photo-sharing app maker called Color opened a spigot of fuel onto the fire when it revealed that it had raised a whopping $41 million before even launching its product.

“Think I might have just heard the bubble pop,” said one of many bewildered tweets that followed the news.

“They may turn out to be the Water World of app startups” said another tweet, referring to the 1995, $175-million-budget Hollywood bomb.

The blog TechCrunch noted that Color’s funding represents the most money that VC firm Sequoia Capital has ever invested in any pre-launch company, including its initial investment in Google.