Want to know the best indicator that we’ve entered the final phase of a startup bubble? It’s the massive success ofShark Tank, the ABC reality hit in which entrepreneurs compete for investment from the likes of Mark Cuban, Barbara Corcoran, and Steven Tisch. The money’s real but the show’s all in fun - or so I thought, until it began rebroadcasting on business channel CNBC. 

It’s one thing to give everyday viewers the vicarious thrill of being a real investor; it’s another when this sort of wish fulfillment becomes a core principle of venture capital. But as Title III of the JOBS Act goes into effect this spring - relaxing the restrictions on qualified investors -a lot of Americans will be making the leap from fantasy angels to real life ones.  Here comes everybody.  

That may be good news for startups in search of capital, but are these new investors just the latest marks for the next economic bubble? Or worse, might they just amplify the euphoria characterizing the startup marketplace? Digital startups already behave like Industrial Age startups on steroids, with hockey-stick upswings that would make Ford or Rockefeller blush. When this digital startup marketplace becomes a net-enabled social media frenzy itself, all bets are off. Or, more likely, on and then off. 

Online networks, like Covestor, Motif, and AngelList, are already lining up to provide easy access for newbie capitalists. AngelList’s new “syndicate” program allows investors to subscribe to the startup portfolios of their favorite angels. The angels, meanwhile, gain the ability to marshall more funds to the companies they like, while taking a fee for their services. 

All this newfound access and collective energy may just be the economic empowerment long promised by the digital age. Or it could simply be the final surge in a new, mother of all bubbles. 

This is why wary risk management professionals have begun passing around the work of Swiss economist Didier Sornette. He says he’s cracked the bubble code, and can predict the point where bubbles go pop.

A bubble, according to Sornette, is the maturation of instability. It comes about when “super exponential” growth couples with positive feedback. That positive feedback is any mechanism that that makes past growth the sole predictor of future growth. It’s nonlinear, irrational, the reflection of what Sornette calls collective, emergent behavior. 

How does the current startup scene rate? 

Unsustainable, superexponential growth? Check. Third quarter startup investment rose by 17% in 2013, while software alone grew by a whopping 77% (USA Today).  Sequoia Capital’s Jim Goetz says he expects the number of hightech startups worth over $1 billion to more than double in the next year alone.

Positive feedback and collective behavior? Check and check. Between Title III and the irrational exuberance we’ve come to expect from our digital and financial media, we can count on the startup funding explosion to serve as evidence of its own endless growth potential. New follow-me services likes Angelist will encourage legions of retail investors to entrust evaluative power to a few highly partial experts, making the emergence of an angels’ echo chamber virtually guaranteed. 

This is not to say that the startups themselves will be worthless. In the digital economy, the winners are few, but boy do they win big. After the automotive bubble, where were still three or four carmakers left competing; after the television network bust there were still three or four major networks. After the dotcom bubble, however, there was only one Amazon. One Google. One eBay. The digital landscape exacerbates the valley between winners and losers. 

In fact, the net accelerates the whole bubble process, as if iterating bubble after bubble in a quest to create the perfect new pretext for investment. It’s as if net has hacked investment, launching a kind of “bubble bubble,” a meta-bubble of finance itself. Maybe our digitally powered economic rinse cycle of bubbles and bailouts has created a kind of supply-push investment landscape of its own.   On a long enough timeline, the sequence of bubbles is itself chartable in Sornette’s model. Investors recognize the pattern of previous bubbles: those who get out in time make a killing. That realization creates the necessary positive feedback loop, and money goes looking for new bubbles in which to invest. The bubbles blow bigger and the crashes fall harder.

As I see it, the coming bubble may turn out to be a great big bubble in passive investment itself. Never before have we seen investors with so much access to startups. But never before have we seen startups with so little need for big investment. 

That’s because the shift to digital has changed the capital requirements of business. There’s no need to build factories; just get a new laptop. A distributed workforce and the practically infinite scalability of cloud services are rendering the yesterday’s pools of bottomless capital obsolete.

In a sense, the real business of internet startups has become decoupled from the financial frenzy of Angel investing around it. Startups are bound to do what they do: keep starting up. Some will take a lot of capital and blow it. Others will succeed, with or without a stockpile of unnecessary resources. The bubble will pop, and they’ll keep on going - unless they’ve taken in too much money from their investors. 

So if you do end up on the wrong side of the coming “bubble bubble,” think twice before you blame the young startup entrepreneurs who pitched you. After all, on the TV show, it’s the investors who are the sharks in the tank.