Everyone’s cutting costs then why wont the VC firms try and control the cash flowing out of their pockets? This means the VC firms are shortening the list of companies they will be spending money in and saving it to invest in those that are more promising (profitable). A report in WSJ puts it into the same league as the problem earlier in the decade, stating:
Tom Crotty, a venture capitalist at Battery Ventures in Waltham, Mass., says the situation is reminiscent of the technology bust earlier this decade, when many venture funds faced a similar cash crunch. With few sales and IPOs at the time, venture investors were left spending money on too many companies. Ultimately, venture capitalists had to cut many start-ups loose
