Veteran venture capitalist Anne DeGheest told WSJ's Venture Capital Dispatch in an interview that a danger of a bubble exists in the feverish activity and high valuations in information technology for the healthcare industry. DeGheest is the founder of HealthTech Capital and has invested heavily in medical devices and healthcare information technology, the report said.

As an investor and entrepreneur in the 1990s' technological boom, DeGheest tells Timothy Hay of Venture Capital Dispatch that she sees some of the signs in the economic bubble of the 1990s are present today. She warns that a "Series B crunch is happening as entrepreneurs that do not have strong business plans attempt to secure funds from investors, the report said.

DeGheest explained a "Series B crunch" by saying, "Right now, there is a bubble forming. The country is re-shaping its largest industry, and it's the biggest experiment we've ever done with the American economy. It's opened the floodgates, and there is a sort of Gold Rush because there is massive opportunity. So much of the money is going into companies at the seed or Series A level, and it's coming from angels and unsophisticated investors. When it comes time for these companies to raise a larger, Series B round, they are going to have to answer a lot of tough questions about their business plans. Many will not have answers to those questions, and some of these companies are going to fail."

She added that there are many unsophisticated investors and angels nowadays that provide a lot of bridge loans. However, bridge loans lead to nowhere if a company does not have a good business plan. She added that good engineers are now in short supply and there are a lot of health IT companies that do not possess real intellectual property.

DeGheest, however, believes that there is huge opportunity in the entire health IT sector. Still, in order to raise a Series B round, she said that companies will need metrics.