two responses: "But there's still a crapload of money, billions in fact, in funds that HAS to be invested in new startups because its part of those fund's char

two responses: "But there's still a crapload of money, billions in fact, in funds that HAS to be invested in new startups because its part of those fund's charter." Disagree with this slightly. Yes, they will always invest in startups, but if they're feeling really skittish, you can bet that they'll hang onto the cash a bit longer than anticipated and be much more selective about what they invest in which translates to fewer deals. Sure, they still have the money, but if they're nervous about spending it, then that, from a startup's perspective, is no different than if their funds were miniscule. Obviously stand-out startups will receive money, but the requirements for what constitutes a stand-out startup are changing daily. "While it's entirely reasonable to fund fewer startups because times are bad. It does not follow that a company that is worth funding should receive a lower valuation because of a bad economy." I don't think that's true. If, collectively, the VC industry resets the valuation equation, startups will receive a lower valuation in the same way that, during boom times, startups receive higher valuations. If they can go up, they can certainly go down.