Wall Street may be abuzz over the Big Data boom, but Chris Lynch of Atlas Venture cautions against jumping on the bandwagon with rose-tinted glasses. The veteran investor stopped by theCUBE at SiliconANGLE’s Big Data NYC 2013 event to share the venture capitalist angle on the transformative impact of information on business.

Having held senior positions in a number of Big Data companies prior to joining Atlas, Lynch knows firsthand that the market is “hungry for IPOs” in the analytics space. Tableau and Splunk have demonstrated that the industry can sustain its momentum in the financial arena, he notes, but it’s “important to sort out the contenders from the pretenders.” Not every venture-backed startup has what it takes to become a publicly-traded company.

“There are a number of companies in the marketplace that have raised lots of capital, been around for quite some time, that have been talking about IPO but there isn’t any visible means of how they’re gonna get there from a revenue perspective,” Lynch details. “At the end of the day, hype can only take you so far. If you’re gonna have a sustainable market cap, you’re gonna have to show the market how your business model makes money.”

The firms that fall under this category are not necessarily overfunded, he says, but they have yet to develop a clear strategy for sustained business growth. VCs should generally only invest “behind revenue” or in companies with a transparent roadmap to profitability. More specifically, investors should be on the look out for startups that innovate in the areas of scale, security and simplicity – preferably all three.

Check out the below for the full highlights from the interview.