The two markets have each grown in valuation at a compound average annual rate of 21% over the past five years.
In the private-equity world, such sunny optimism in valuation is referred to as "sticky" pricing.Dodgy valuations also arise when private-equity firms sell or swap assets among themselves, an activity that is growing in popularity.
This is the "we'll grow into our valuation" strategy, nearly universally said in Silicon Valley and equally often untrue.
"Companies can grow into a valuation if they deliver on earnings.
These are all cyclical businesses, but with the right manager, investors can make decent returns and protect themselves from the growing concerns over valuation in many more widely followed stocks.
Watching Uber's valuation grow 20x in 20 months while the Barclay Hedge Fund Index reported a measly.93 percent YTD return frustrated institutional money managers.
Robinhood is rolling out its Coinbase-killer that's already helped the fintech startup's valuation grow 4X in a year.
What Europe needs is a self-reinforcing cycle to kick in with a critical mass of VC-backed companies that have demonstrated some measure of scaling-up and success in growing valuations and promising exit options - crucial to attracting more investments in the tech sector.
"They're going to grow into their valuations," Mr. Garcia said.
