The problem is potentially much larger than you describe currently and what happened in 2000/2001. There are two additional factors at stake which have supercharged startup valuations in this cycle - competition amongst funds and the involvement of non-traditional funders such as pension funds. When a PE firm announces a $1B round these days they don't actually get the cash, they get funding commitments which they draw on as required. Helps with rate of return announcements but try exercising those commitments when your backers are pinched. Pension funds hate down rounds as it forces them to mark down the carrying value of their investments and could raise nasty questions from regulators and their boards. The net result is that there may not be powder in the kegs to fund additional rounds for the better portfolio investments let alone the laggards and newcomers. I wouldn't call it based on a few weeks of market turmoil but if this drags on then there will be bloodshed in the Valley an order of magnitude greater than what we saw 15 years ago.