Don’t look now, but anyone looking to argue that Silicon Valley is in a bubble just got a bit more ammo.

Valley law firm Fenwick & West today published its Second Quarter Silicon Valley Venture Capital Survey revealing that valuations growth is at record levels. Headlines being what they are, however, there’s far more nuance to this story than immediately meets the eye, and there’s a case to be made that this is very much not a bubble – at least not yet.

But first, the data. Fenwick looked at 174 tech and life sciences deals completed in Silicon Valley during the quarter, representing a combination of its own proprietary data and that coming from third-parties like Thomson Reuters, Dow Jones, and CB Insights. The report indicates that round-to-round valuations rose by a record average of 113 percent during the period, as compared to Q1 2014’s already substantial 85 percent increase. The median price increase was a stout 75 percent – a drop owing to the skewing effects of a handful of large outlier deals – another record that marks a jump from the 52 percent increase seen during Q1.

Moreover, 80 percent of all rounds completed during the quarter were “up rounds,” as compared to just 6 percent “down rounds” and 14 percent flat rounds. The 74 point difference marks the largest such delta between up and down rounds in any period since Fenwick began tracking this data in 2002.

So if that’s the lay of the land, how is it that we’re not a bubble?

Fenwick partner Barry Kramer, who co-authored the report, breaks down the fundamental signs of a bubble into three things: high valuations, an absence of investment fundamentals, and large volumes of investment activity. Today’s report confirms that the first factor is very much a reality, but the latter two are far less of an issue.

Individual examples of poorly supported investments are easy to find, but on a systemic level, rising valuations are, in the majority of cases, being supported by real revenue, massive audiences, traction, and fundamental disruptions in large legacy industries – factors that were largely absent in the 2000 dot-com bubble. And in terms of the volume of investment activity, the venture capital industry has undergone a dramatic rightsizing over the last decade, resulting in far fewer firms and far less capital in the ecosystem. Just like it’s harder for startups to raise today than it was in 1999, it’s much harder for would-be VCs to raise new funds in this environment.

There are fundamental shifts in the way companies are built today that further explain the recent rise in venture capital valuations. The first is that many markets that could have once supported multiple successful companies are viewed today by both entrepreneurs and investors as winner-take-all. With modern connectivity, it is now possible for companies to scale awareness and adoption far faster and wider than was the case even a decade ago. Naturally, the ultimate value of these winning companies will be higher than their more regional predecessors, and when investors see indications that a company is headed for such a victory, valuations can grow rapidly in a short period of time.

It’s also worth noting that the founders building today’s startups are extremely well educated – thanks, in large part, to online resources – as to the nuances of building high-growth, disruptive companies, making them in many ways better prepared than last generation’s entrepreneurs. With this in mind, it’s not a surprise that when companies find some semblance of product-market fit, adoption and thus valuations now grow faster than ever.

Secondly, as we’ve reported ad nauseum, companies are staying private longer and raising more capital in the private markets than at any point in history. This is in part due to the regulatory burdens of being a public company, but also due to the inherent challenges of building these aforementioned global category winners. Many of today’s multi-billion dollar companies will complete two or three more private funding rounds before pursuing an IPO than was the case a generation ago. And with these large, and often exponential rounds included within the data set, comparing today’s valuations to those a generation ago is very much apples to oranges.

Another sign that this isn’t the same type of blind groupthink that drove valuations ahead of the last bubble is that the outliers are occurring across multiple categories. Today we have consumer Web and mobile, on-demand and sharing economy, enterprise software, hardware, and life sciences to name just a few sectors that have produced big winners. In 1999, the only requirement to raise VC was to have “dot com” in your company name.

Lastly, while things may look rosy in the private markets, this excitement has hardly carried over to the public markets. Just a few months ago, we saw enterprise stocks take a double-digit haircut overnight as Wall Street reduced the revenue multiples it was willing to pay for these companies. Almost immediately, private market SaaS valuations began to fall back to earth. As this recent cycle demonstrates, while market fundamentals may deviate from reasonable ranges briefly, corrections today also come quicker than more efficiently than in the past.

The challenge with calling a bubble is that the key factor is inherently a qualitative one: irrational exuberance. While there is certainly exuberance in the Valley today, it’s an outlook that seems rooted in (at least perceived) logic and data. Venture capital will never be a business governed by the seemingly transparent price to earnings ratios that guide public market investors. It will remain inherently a business of predicting the future. When valuations are high, it’s a sign that investors see massive opportunity ahead. With massive shifts underway like the emergence of mobile, cloud computing, BYOD, and crowdfunding, among others, it shouldn’t be a surprise that we’re seeing capital chasing real innovation across industries.