"What I am concerned about is that it seems everyone wants to start a company instead of just surrounding an idea and going after it," he said. "When you have mutiple companies going after the same opportunity, things are not going to work out for everyone."
Index has also invested in Stardoll, a teen doll-dressing community Rimer said is selling 500,000 items of virtual clothing every day.
"This is very different from the first bubble," he said. "It's less expensive to start a company and what you can do with so much of this new innovation and cheapness is come up with a better revisited version of pretty much every site on the internet."
Speaking on a panel, Israeli venture capitalist Ouriel Ohayon said that what many people regard as Web 2.0 differs from the dotcom boom of the late 1990s because there is no longer a risk of "economic cataclysm".