It's all a cycle.
In many cases, the VC's, especially the large ones are really pressuring CEO's of startups they're invested in to cut now. They should've been working aggressively toward positive cash flow all along, but now there's no credit, no big market for IPOs or buyouts in sight, so the investors want to see profitability.
The oversized staffs, herman miller chairs and half million dollar video conferencing and presentation rooms are about to go bye bye again. And are as we speak. And if you are a principle and you haven't taken some money off the table yet, you're not likely to get any soon. Kevin Rose probably feels like a genius right now due to timing. Digg got $20 million and he finally took some off the table and got paid just a couple of weeks before all of this crashed.
This has been circulating for a week or so, but Sequoia's presentation to the firms they're invested in is typical.
http://www.techcrunch.com/2008/10/10...ation-of-doom/