According to the new Money Tree report from Price Waterhouse Coopers and the National Venture Capital Association, there was nearly $5.9 billion dollars invested in 736 deals in the first quarter of 2011. According to Dan Primack over at Fortune, that works out to an average of $7.98 million a pop, an 18 percent increase over last quarter, 21.6 percent higher than the average in 2010 and 47 percent higher than the average deal size in 2009.

If the growth of deal size was a reflection of a move towards later stage funding, which typically requires more capital, than this change would seem less important. But as Primack notes, this expansion is across all stages save the seed round, for which it is difficult to gather hard numbers. Anecdotally, at least in New York, Betabeat has been told by numerous investors that the seed stage market is overcrowded and overfunded. Primack goes ahead and puts “bubble” in his headline.

Where is all this money going? “The best minds of my generation are thinking about how to make people click ads,” says Jeff Hammerbacher, a former research scientist at Facebook, in a new Bloomberg Businessweek article. “That sucks.”

Not that Bloomberg has anything against capitalism, but it’s newest tech hire, Ashlee Vance, does seem to question what will be left behind by the current boom. If the 1980s left us with the infrastructure for widespread adoption of personal computers, and the 1990s for widespread adoption of the internet, what will social web entrepreneurs bequeath on the next generation?

The difference, Vance suggests, is that most of this crop of startups seem focused on creating a service that helps sell other people’s products:

So if this tech bubble is about getting shoppers to buy, what’s left if and when it pops? Perlman grows agitated when asked that question. Hands waving and voice rising, he says that venture capitalists have become consumed with finding overnight sensations. They’ve pulled away from funding risky projects that create more of those general-purpose technologies—inventions that lay the foundation for more invention. “Facebook is not the kind of technology that will stop us from having dropped cell phone calls, and neither is Groupon or any of these advertising things,” he says. “We need them. O.K., great. But they are building on top of old technology, and at some point you exhaust the fuel of the underpinnings.”

It’s clear that social services like Facebook and Twitter are putting in place a communications infrastructure on the web capable of changing elections and catalyzing revolutions, so perhaps’s Vance’s skepticism there is misplaced. But even Groupon founder Andrew Mason, who’s $950 million raise this quarter surely contributed to the bubble Primack notes, has admitted that he has had much cooler and more important ideas than email coupons.

Follow Ben Popper via RSS.