Investors need to become more discriminating when investing in start-up technology start-ups, following recent “over-enthusiasm” in Silicon Valley, according to Bill Gates.

The Microsoft co-founder said he would bet on valuations of so-called “unicorns” — the 150 or so private companies that have been valued at more than $1bn — falling over the next two years, but that venture capital remains an attractive long-term asset class in an era of ultra-low interest rates.

The valuations of unicorns have come under pressure after disappointing stock market flotations by some of their number, including payments company Square and Box, a cloud storage company. CB Insights, the research group, has identified seven unicorns that are now worth less than their peak valuation. That, plus wider concerns about the global economy, has led to a sense of a Silicon Valley boom cooling.

“If you gave me a basket of unicorns, I wouldn’t know right now whether to go long or short,” Mr Gates said. “I might go short in the two-year timeframe, but not in the longer timeframe because all it takes is for one or two of those to join the pantheon and your short would make you go bankrupt.”

He added: “Something that has a chance of 10 per cent-plus returns, even if it comes with a lot of variance, is very attractive in a period where the German long bond has a 1.2 per cent return.”

Energy start-ups, Mr Gates said, had not enjoyed the same frothiness in valuations as IT companies, largely because of the much larger sums needed before a company can prove that the technology works.