The Seattle Post Intelligencer has a story today lamenting the rash of high valuations for early-stage, venture backed Net companies. Is the Internet market too hot once again?

Geoffrey Entress, a principal at Madrona Venture Group, said his firm has passed on deals in which the valuation became too high. But he doesn't think it is a feeding frenzy, especially for the earlier-stage deals in which Madrona typically invests. He believes the biggest increases in valuations are coming among later-stage deals, those companies that are nearing an IPO or acquisition.

While VentureOne does not break out valuations by stage on a regional basis, nationally later-stage companies saw big gains in valuations. The median valuation during the third quarter was $37 million, up from $30 million for the same period last year.

Toronto entrepreneurs don't have to worry about high valuations - or any valuations at all.

Canadian venture capital investment continues to drop allowing U.S. firms to cherry-pick the best minds and products we have to offer. Of all the issues facing our local tech sector it is this lack of early-stage support that most threatens our long term global competitiveness. But we do not have to suffer from the sixties-like "branch plant" mentality that is killing the auto sector in this country. The technology entrepreneurs here are as bright as any in the U.S. or elsewhere. The fact that we chose to remain second tier is disturbing.