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Valuations up

The median valuation of U.S. based venture-backed companies has climbed to $18.4 million in the first quarter, or $3 million more than the same quarter a year ago.

But this isn’t necessarily a sign of a bubble. Valuations of early stage companies aren’t that high compared to previous years — and so it is not quite the frenzy in Silicon Valley that some people say it it is.

In Europe, valuations also increased, to 6.1 million euros, according to a survey to be released tomorrow by Dow Jones VentureOne.

The first quarter data, representing the value of companies set by venture capitalists before they invest their money, shows levels at their highest in more than five years. But the rise was caused by increased later-stage investing in information technology and healthcare, Dow Jones said in a statement. Later-stage companies tend to have higher valuations because they are more advanced. (Update: See the Dow Jones press release, which also says merger and acquisition activity has helped boost valuations.)

Valuations haven’t been this high since the fourth quarter of 2000, when it was $23 million.

Still, even if there is no sign of a bubble yet, it’s a good idea to ask for a decent valuation if you are an entrepreneur out raising cash from venture capitalists. We were at a brunch today where the buzz among Silicon Valley investors was that it is so crazy out there that they are losing companies to other investors if they don’t make immediate offers. Things seem hot — but it seems limited to Web 2.0 land.