In 1981, Microsoft raised $2.5 million from the VC firm Technology Venture Investors, at a $50 million valuation. Its revenues were $40 million. (Current dollars.)
In May 2011, AirBnB raised a VC round. Like Microsoft, it had large and fast-growing revenues ($25 million). Its valuation, however, was higher. A lot higher. Over $1 billion, more than twenty times as much.
What changed?
The Rationalist Conspiracy 
People’s confidence in the ability of startups, in general, to turn into hugely successful companies?
People’s confidence in the existence of greater fools?
In 1981, people did not believe that software companies could grow to be worth a billion dollars or more. Now, we have Microsoft, Facebook, Google as examples. In short: the market is much bigger.
Interest rates surely have something to do with it. In 1981, you could buy a 30-year government bond from the U.S. for around 15% interest, which would have a real return of 10% per year. Today, that same bond would probably only have around 3% interest, or perhaps 1% real return per year.. If investing in a random tech company has a 50% chance of growing at 15% a year for the next 30 years, or failing and returning 0%, that investment would be a terrible idea in 1981 but a great one today.
The only alternative is that people are irrational and prone to herding behavior, and so have become entrapped in a Silicon Valley tech bubble where companies with minimal economic value are bought for many times their fair price by thousands of investors desperate to find the next Google and willing to take a loss on 99% of their investments in the hopes they luck out on the last 1%. But c’mon, surely such a failure of markets is totally unprecedented and humans have never before chased illusory returns hoping to become fantastically wealthy with no effort on their part.
I have an uninvestigated hypothesis that says the root cause of all web 2.0 start-up overvaluations is Peter Thiel.